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Finance

  

growingperpetuity

  

present value of a growing perpetuity

 

Calling Sequence

Parameters

Description

Examples

Compatibility

Calling Sequence

growingperpetuity(cash, rate, growth)

Parameters

cash

-

amount the perpetuity will pay one period from now

rate

-

interest rate

nperiods

-

growth rate in the payments

Description

• 

The function growingperpetuity computes the present value of a perpetuity paying the amount cash one period from now, with increasing payments at the end of each periods. The payments increase according to the growth rate.

• 

Since growingperpetuity used to be part of the (now deprecated) finance package, for compatibility with older worksheets, this command can also be called using finance[growingperpetuity]. However, it is recommended that you use the superseding package name, Finance, instead: Finance[growingperpetuity].

Examples

I hold some shares of the XYZ company. I will receive dividends each year. The next dividend is expected to be 1.5 units per share, one year from now. The yearly dividends are expected to increase by 2% per year, for the foreseeable future What is the present value, per share, of the dividend payments, given that the discount rate is 11%?

withFinance:

growingperpetuity1.5,0.11,0.02

16.66666667

(1)

Compatibility

• 

The Finance[growingperpetuity] command was introduced in Maple 15.

• 

For more information on Maple 15 changes, see Updates in Maple 15.

See Also

Finance

Finance[growingannuity]

Finance[perpetuity]

 


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