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If a perpetuity pays a cash flow (C) every time period, forever, how come it is not worth an infinite amount of money right now? Explain.
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Jul 7, 2024
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If a perpetuity pays a cash flow (C) every time period, forever, how come it is not worth an
infinite amount of money right now? Explain.
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There’s a difference between an infinite amount of something and an infinitely compounding amount of something. You’re infinitely expanding on a finite starting point. So while there is no definitive end point, the start point is finite.
Mulhoon
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Jul 12, 2024
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