rce Sam hos plomis ed to leave y ou and gaN Orl an annual ca
rce Sam hos plomis ed to leave y ou and gaN Orl an annual ca??4%. 6.933
Solution
Expected Payment = $600
Growth Rate = 4%
Interest Rate = 9%
Value of Growth Perpetuity = Expected Payment / (Interest Rate - Growth Rate)
Value of Growth Perpetuity = $600 / (0.09 - 0.04)
Value of Growth Perpetuity = $600 / 0.05
Value of Growth Perpetuity = $12,000
