An asset characterized by cash flows that increase at a constant rate forever is called a:

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A growing perpetuity is an asset that produces cash flows that increase at a constant rate forever. This is different from a regular perpetuity, which has constant cash flows forever. Preferred stock pays a fixed dividend, so it is not a growing perpetuity. A growing annuity has increasing cash flows for a fixed number of periods, not forever. A common annuity is simply a series of fixed payments received or paid over a set period of time. A perpetuity due is a perpetuity where the first payment is received immediately, rather than at the end of the period.

An Asset Characterized by Cash Flows That Increase at a Constant