The Gordon model ________ A: is a generalization of the perpetuity formula to cover the case of a growing perpetuity. B: is valid only when $g$ is less than $k$. C: is valid only when $k$ is less than $g$. D: is a generalization of the perpetuity formula to cover the case of a growing perpetuity and is valid only when $g$ is less than $k$. E: is a generalization of the perpetuity formula to cover the case of a growing perpetuity and is valid only when $k$ is less than $g$.
The Gordon model ________ A: is a generalization of the perpetuity formula to cover the case of a growing perpetuity. B: is valid only when $g$ is less than $k$. C: is valid only when $k$ is less than $g$. D: is a generalization of the perpetuity formula to cover the case of a growing perpetuity and is valid only when $g$ is less than $k$. E: is a generalization of the perpetuity formula to cover the case of a growing perpetuity and is valid only when $k$ is less than $g$.
The interest rate is 10%. What is the PV of an asset that pays $1 a year in perpetuity? A: $20 B: $30 C: $10 D: $40
The interest rate is 10%. What is the PV of an asset that pays $1 a year in perpetuity? A: $20 B: $30 C: $10 D: $40
Which of the following statements is false? A: The difference between an annuity and perpetuity is that an annuity ends after some fixed number of payments. B: Most car loans, mortgages, and some bonds are annuities. C: A growing perpetuity is a cash flow stream that occurs at regular intervals and grows at a constant rate forever. D: An annuity is a stream of N equal cash flow paid at irregular intervals.
Which of the following statements is false? A: The difference between an annuity and perpetuity is that an annuity ends after some fixed number of payments. B: Most car loans, mortgages, and some bonds are annuities. C: A growing perpetuity is a cash flow stream that occurs at regular intervals and grows at a constant rate forever. D: An annuity is a stream of N equal cash flow paid at irregular intervals.
A perpetuity that pays $250 per year at an interest rate of 4% would have a market price equal to A: $6,250. B: $25,000. C: $2,500. D: $62,500.
A perpetuity that pays $250 per year at an interest rate of 4% would have a market price equal to A: $6,250. B: $25,000. C: $2,500. D: $62,500.
The zero growth model is a special case of what valuation model? A: Variable growth model B: Constant growth model C: Delta growth model D: Perpetuity valuation model E: None of the above
The zero growth model is a special case of what valuation model? A: Variable growth model B: Constant growth model C: Delta growth model D: Perpetuity valuation model E: None of the above
A perpetuity is defined as a sequence of A: equal cash flows occurring at equal intervals of time for a specific number of periods. B: equal cash flows occurring at equal intervals of time forever. C: unequal cash flows occurring at equal intervals of time forever. D: unequal cash flows occurring at equal intervals of time for a specific number of periods.
A perpetuity is defined as a sequence of A: equal cash flows occurring at equal intervals of time for a specific number of periods. B: equal cash flows occurring at equal intervals of time forever. C: unequal cash flows occurring at equal intervals of time forever. D: unequal cash flows occurring at equal intervals of time for a specific number of periods.