Which of the Following Is True About Perpetuities

Multiple Choice

Which of the following is true about perpetuities?

A) Since a perpetuity generates cash flows every period infinitely, the cash flow generated equals the PV times the interest rate.
B) Since a perpetuity generates cash flows every period infinitely, each cash flow must be discounted to calculate the present value.
C) Since a perpetuity generates cash flows every period infinitely, there is no way to solve for the cash flow given the present value and the interest rate.
D) A perpetuity does not generate cash flows every period infinitely.
E) Since a perpetuity generate cash flows every period infinitely, the cash flow generated equals the PV divided by the interest rate.