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, initial cash outflow 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 using the present value and the interest rate.
D) Since a perpetuity generates cash flows every period infinitely, its FV is the same as its PV.