Essay
A friend who owns a perpetuity that promises to pay $1,000 at the end of each year,forever,comes to you and offers to sell you all of the payments to be received after the 25th year for a price of $1,000. At an interest rate of 10%,should you pay the $1,000 today to receive payment numbers 26 and onwards?
What does this suggest to you about the value of perpetual payments?
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The present value of the perpetuity is $...View Answer
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