You just won the lottery. You and your heirs will receive $25,000 per year forever, beginning one year from now. If the present value of the lottery is $416,667, what is the discount rate used to value this perpetuity?
A) 4.0%
B) 5.0%
C) 6.0%
D) 7.0%
E) 8.0%
Correct Answer:
Verified
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