Which of the following statements regarding perpetuities is FALSE?
A)To find the value of a perpetuity one cash flow at a time would take forever.
B)A perpetuity is a stream of equal cash flows that occurs at regular intervals and lasts forever.
C)PV of a perpetuity =
D)One example of a perpetuity is the British government bond called a consol.

Question

Which of the following statements regarding perpetuities is FALSE?
A)To find the value of a perpetuity one cash flow at a time would take forever. 
B)A perpetuity is a stream of equal cash flows that occurs at regular intervals and lasts forever. 
C)PV of a perpetuity = 
D)One example of a perpetuity is the British government bond called a consol.

Quizplus · Accepted Answer

The statement that PV of a perpetuity is 11ea7ff7_a57e_ed76_846e_97019248560d_TB2790_11 is false. This value is not a formula or a standard value for the present value of a perpetuity. The correct formula to find the present value of a perpetuity is C/r, where C is the cash flow and r is the discount rate.

Which of the Following Statements Regarding Perpetuities Is FALSE