What is the present value of a $100 perpetuity if the interest rate is 7%? If interest rates doubled to 14%, what would its present value be?
belongs to book: FUNDAMENTALS OF FINANCIAL MANAGEMENT|Eugene F.Brigham, Joel F. Houston|12th Edition| Chapter number:5| Question number:18
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Accounting
PV = $100/0.07 = $1428.57
need an explanation for this answer? contact us directly to get an explanation for this answerPV = 100/0.14 = $714.29