Which of the following comes closest to the value of a perpetuity that pays to the holder the amount of $100 beginning at the end of year 5 and then continues forever (in year 6, year 7, and so on without ever stopping). Use a required rate of return of 2%?

Select one:

a. $5,000

b. $4,619

c. $2,962

d. $2,137

e. $1,645

Answer rating: 100% (QA)

Value as on year 5Annual cash flowsr... View the full answer