The formula Po = Pt/((1 + r)^t) holds good for assets which:
I. Pay no dividends
II. Are traded in a competitive market
III. Cost nothing to hold

Name: The formula Po = Pt/((1 + r)^t) holds good for assets which: I. Pay no dividends II. Are traded in a competitive market III. Cost nothing to hold
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Quizplus · Accepted Answer

The formula Po = Pt/((1 + r)^t) is used for discounting future cash flows to present value, which applies to assets that pay no dividends, are traded in a competitive market, and cost nothing to hold.

The Formula Po = Pt/((1 + R)^t) Holds Good for Assets