Multiple Choice
A perpetual cash flow stream makes its first payment of $500 in one year. Using a 7% annual discount rate and a 3% growth rate in the value of subsequent payments, what is the present value of this growing perpetuity?
A) $2,000
B) $20,000
C) $12,500
D) $125,000
Correct Answer:
Verified
Correct Answer:
Verified
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