If you are willing to pay $46,868.00 today to receive $4,481.00 per year forever then your...
If you are willing to pay $46,868.00 today to receive $4,481.00 per year forever then your required rate of return must be ____%. Assume the first payment is received one year from today.
Homework Answers
Value of perpetuity=Annual payments/required rate of return
46,868=4481/required rate of return
required rate of return=(4481/46,868)
which is equal to
=9.56%(Approx).
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