The first payment of a perpetuity-immediate is 60, Ask an Expert

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The first payment of a perpetuity-immediate is 60. Subsequent payments decrease by 1 per year until they reach a level of k. Payments remain constant at k thereafter. The present value of the perpetuity is equal to the present value of a perpetuity immediate paying 44 each year. Calculate k assuming the effective annual interest rate is 5%

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Financial Management, Finance

Category:- Financial Management
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