An asset characterized by cash flows that increase at a constant rate forever is called a:
A)growing perpetuity.
B)growing annuity.
C)common annuity.
D)perpetuity due.
E)preferred share.

Question

Quizplus · Accepted Answer

A growing perpetuity is an asset that generates cash flows that increase at a constant rate indefinitely. This is different from a regular perpetuity, which generates cash flows that remain constant indefinitely.

An Asset Characterized by Cash Flows That Increase at a Constant