What is the formula to calculate the present value of a perpetuity?

Economics Time Value Of Money Questions



80 Short 71 Medium 54 Long Answer Questions Question Index

What is the formula to calculate the present value of a perpetuity?

The formula to calculate the present value of a perpetuity is:

PV = C / r

Where:
PV = Present value
C = Cash flow received per period
r = Discount rate or required rate of return