?

Corporate Finance

Free Version

Upgrade subject to access all content

Easy

Annuities vs. Perpetuities Concepts

CORPFN-Y4XACX

Which one of the following statements about perpetuities and annuities is FALSE?

A

The difference between an annuity and a perpetuity is that an annuity ends after a fixed number of payments.

B

An annuity is a stream of N equal cash flows paid at irregular intervals.

C

Most loans and most bonds are annuities.

D

A growing perpetuity is a cash flow stream that occurs at regular intervals and grows at a constant rate forever.