A perpetuity is defined as:
A) Equal cash flows at equal intervals of time for a specific number of periods
B) Equal cash flows at equal intervals of time forever
C) Unequal cash flows at equal intervals of time forever
D) None of the above

Question

Quizplus · Accepted Answer

A perpetuity is a financial instrument that has equal cash flows at equal intervals of time forever. This means that the cash flows continue indefinitely, and there is no predetermined end date or number of periods. Examples of perpetuities include certain types of bonds or preferred stock that pay a fixed dividend or interest payment regularly.

A Perpetuity Is Defined As