The present value of growing perpetuity is computed as the cash flow occurring at the end of the first period divided by the difference between interest or discount rate and growth rate.

Question

Quizplus · Accepted Answer

This is the formula for the present value of a growing perpetuity: PV = C/(r-g), where C is the cash flow at the end of the first period, r is the interest or discount rate, and g is the growth rate.

The Present Value of Growing Perpetuity Is Computed as the Cash