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Which ones of the following choices represent accurate statements about growth rate and interest rate?
Select ALL that may apply.
The only realistic perpetuities are those with a growth rate less than the interest rate.
Perpetuities with a growth rate greater than the interest rate exist in practice. They have a higher present value than perpetuities with growth rate less than interest rate.
The growth rate can be greater than the interest rate in a growing annuity but not in a growing perpetuity.
The perpetual growth rate can never be greater than the interest rate, but it can be equal.