What Is the Present Value of a Perpetuity Formulation and What Are Perpetuities?
Primary of all, what is the ordinary indicating of "perpetuity?" It simply suggests "permanently." So in finance, what do we necessarily mean by this identical concept? Effectively, envision I gave you a piece of paper or certificate, and that paper promised that I would pay outside you a fixed number nearly every 12 months, eternally. That piece of paper is labeled as a "perpetuity."
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