If we assume that a company will be in business forever and that it continues to pay dividends during its existence,then we have an annuity dividend stream.

Question

Quizplus · Accepted Answer

An annuity involves payments of equal amounts at regular intervals for a specific period of time, whereas a dividend stream from a company assumed to be in business forever and paying dividends continuously would be considered a perpetuity, not an annuity, because it does not have a fixed end period.

If We Assume That a Company Will Be in Business