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11

Finance

11. ?(Present value of a growing? perpetuity)  What is the present value of a perpetual stream of cash flows that pays ?$6,500 at the end of year one and the annual cash flows grow at a rate of 2?% per year? indefinitely, if the appropriate discount rate is 11?%? What if the appropriate discount rate is 9?%?

A)  If the appropriate discount rate is 11?%, the present value of the growing perpetuity is? $ (Round to nearest cent)

B) If the appropriate discount rate is 9%, the present value of the growing perpetuity is $ (Round to nearest cent)

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