A perpetuity is a constant stream of identical cash flows with no end.  The formula for determining the [[Present Value]] of a perpetuity is as follows:

$\Large PV$ $=$ $\LARGE \frac{C_1}{(1+r)^1} + \frac{C_2}{(1+r)^2} + \frac{C_3}{(1+r)^3} + ... = \frac {C}{r}$

Source: http://www.investopedia.com/terms/p/perpetuity.asp

In [[Principles of Corporate Finance]] the perpetuity is defined as an [[Annuity]] in which the periodic payments begin on a fixed date and continue indefinitely.
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finance_public
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Fri, 06 Jan 2012 09:44:06 GMT
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dirkjan
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Fri, 06 Jan 2012 09:44:06 GMT
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dirkjan
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M12
Principles of Corporate Finance
Term
creator
dirkjan