present value of a perpetuity - Maple Help

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Finance[perpetuity] - present value of a perpetuity

Calling Sequence

perpetuity(cash, rate)

Parameters

cash

-

amount of payments

rate

-

interest rate

Description

• 

The function perpetuity computes the present value of an instrument that pays the amount cash at the beginning of each period, forever, starting in one period.

• 

An example of a perpetuity is a stock that pays the same dividends year after year.

• 

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

Examples

Utility ABC pays a dividend of 1.5 units per share every year. Given a discount rate of 11%, what is the present value per share of those dividends?

withFinance:

perpetuity1.5,0.11

13.63636364

(1)

See Also

Finance, Finance[growingperpetuity]


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