?

Corporate Finance

Free Version

Upgrade subject to access all content

Easy

Understanding the Nature of a Perpetuity

CORPFN-EMLK05

Which of the following examples of cash flows is an annuity in perpetuity (assuming that normal operations continue)?

A

A lot​tery winner receiving an annual payment for 20 years.

B

An individual making monthly credit card payments until the debt is repaid.

C

A corporate landlord collecting monthly rents on an apartment building.

D

An individual receiving compensatory damages for medical malpractice through the end of his or her life.