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Which of the Following Is True About Perpetuities

Question 10

Multiple Choice

Which of the following is true about perpetuities?


A) All else equal, the present value of a perpetuity is higher when the periodic cash flow is higher.
B) All else equal, the present value of a perpetuity is higher when the interest rate is lower.
C) If two perpetuities have the same present value and the same interest rate, they must have the same cash flows.
D) All of the above are true statements.

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