AB Company Has Decided to Donate to the Children's Hospital

Multiple Choice

AB Company has decided to donate to the children's hospital every year.The company 's first payment will be $1 million and it will grow at a constant rate of 3% forever.What is the present value of this growing perpetuity if the current market rate is 5%?

A) $150 million
B) $20 million
C) $33.33 million
D) $53.33 million
E) $50 million