Question: Attempts Keep the Highest / 3 4. Time Value of Money: Perpetuities An annuity that goes on indefinitely is called a perpetuity. The payments of

Attempts Keep the Highest / 3 4. Time Value of Money:

Attempts Keep the Highest / 3 4. Time Value of Money: Perpetuities An annuity that goes on indefinitely is called a perpetuity. The payments of a perpetuity constitute a/an series. The equation is: PVofaperpetuity=TPMT A stock with no maturity is an example of a perpetuity. Quantitative Problem: You own a security that provides an annual dividend of $100 forever. The security's annual retum is 5%. What is the present value of this security? Round your answer to the nearest cent. $

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