Montreal Financial Services Company offers a perpetuity of $50,000 per year with the first payment on January 1 next year.If your opportunity costs are constant over time, the price you are willing to pay for this perpetuity ______ over time.

Question

Quizplus · Accepted Answer

The price you are willing to pay for a perpetuity, given a constant opportunity cost, remains the same over time because the value of the perpetuity is calculated based on the fixed payment and the discount rate (opportunity cost), which are both constant in this scenario.

Montreal Financial Services Company Offers a Perpetuity of $50,000 Per