Multiple Choice
An electric company has offered the following perpetuity to investors to raise capital for the firm.The perpetuity will pay $1 next year,and it is promised to grow at 5% per year thereafter.If you can earn 10% on invested money,how much would you pay today for this perpetuity?
A) $100
B) $50
C) $40
D) $20
Correct Answer:
Verified
Correct Answer:
Verified
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