A friend who owns a perpetuity that promises to pay 1000 at, Ask an Expert

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A friend who owns a perpetuity that promises to pay $1,000 at the end of each year, forever, comes to you and offers to sell you all of the payments to be received after the 25th year for a price of $1,000. At an interest rate of 10%, should you pay the $1,000 today to receive payment numbers 26 and onwards? What does this tell you about the value of perpetual payment to be received after the 25th year?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92696261

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