Today is t = 0. The risk free rate is 5%. Consider the following sets of...
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Today is t = 0. The risk free rate is 5%. Consider the following sets of cash flows: Set 1: Growing perpetuity with first cash flow equal to $105 at t = 2 and g = 3%. Set 2: Growing perpetuity with first cash flow equal to $105(1.04) at t = 3 and g = 3%. Set 3: Growing perpetuity with first cash flow equal to $105(1.042) at t = 4 and g = 3%. ...(The pattern continues to Set infinity)... What is the total PV of all cash flows from all of the infinite sets (rounded to the nearest dollar)? Today is t = 0. The risk free rate is 5%. Consider the following sets of cash flows: Set 1: Growing perpetuity with first cash flow equal to $105 at t = 2 and g = 3%. Set 2: Growing perpetuity with first cash flow equal to $105(1.04) at t = 3 and g = 3%. Set 3: Growing perpetuity with first cash flow equal to $105(1.042) at t = 4 and g = 3%. ...(The pattern continues to Set infinity)... What is the total PV of all cash flows from all of the infinite sets (rounded to the nearest dollar)?
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To calculate the total present value of all cash flows from all infinite sets we can use the formula ... View the full answer
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