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

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 with growth?

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

PV = C / (r - g)

Where:
PV = Present value
C = Cash flow received each period
r = Discount rate
g = Growth rate of the cash flow