perpetuity
Sign in to saveIn finance, a perpetuity is an annuity with payments that continue indefinitely.
~7 min read
Article
13 sectionsContents
- Types and assumptions
- Ordinary perpetuity
- Perpetuity due
- Level perpetuity
- Growing perpetuity
- {{Anchor|Detailed description}} Valuation
- Level perpetuity (ordinary perpetuity)
- Perpetuity due
- Growing perpetuity
- Applications
- {{Anchor|Real-life examples}} Examples
- References
- See also
In finance, a perpetuity is an annuity with payments that continue indefinitely.
Perpetuity formulas are used in time value of money and discounted cash flow valuation. Common applications include valuing shares under the dividend discount model, estimating terminal value in company valuation, and capitalising stabilised income in real estate appraisal.
Connections
International Standard Book Number
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Wikisource
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geometric progression
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dividend
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annuity
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Encyclopædia Britannica 11th edition
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preferred stock
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time value of money
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real estate appraisal
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discounted cash flow analysis
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Basel III
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perpetual bond
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Dividend discount model
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Stock valuation
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Tier 1 capital
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Terminal value
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