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

 rce Sam hos plomis ed to leave y ou and gaN Orl an annual ca??4%. 6.933 SolutionExpected Payment = $600 Growth Rate = 4% Interest Rate = 9% Value of Growth Per

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