Difference between revisions of "Perpetuity"
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| − | + | A perpetuity is a constant stream of identical cash flows with no end. The formula for determining the [[Present Value|Present Value]] of a perpetuity is as follows: | |
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| + | <math>PV</math> <math>=</math> <math>\frac{C_1}{(1+r)^1} + \frac{C_2}{(1+r)^2} + \frac{C_3}{(1+r)^3} + ... = \frac {C}{r}</math> | ||
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| + | Source: http://www.investopedia.com/terms/p/perpetuity.asp | ||
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| + | In [[Principles of Corporate Finance|Principles of Corporate Finance]] the perpetuity is defined as an [[Annuity|Annuity]] in which the periodic payments begin on a fixed date and continue indefinitely. | ||
[[Category:finance]] | [[Category:finance]] | ||
Latest revision as of 19:25, 27 August 2020
A perpetuity is a constant stream of identical cash flows with no end. The formula for determining the Present Value of a perpetuity is as follows:
Source: http://www.investopedia.com/terms/p/perpetuity.asp
In Principles of Corporate Finance the perpetuity is defined as an Annuity in which the periodic payments begin on a fixed date and continue indefinitely.
