### Formula

i

interest rate

PVGP

perpetual annuity

A

annuity payment in the first period

g

fixed rate

i

interest rate

PVGP

perpetual annuity

A

annuity payment in the first period

g

fixed rate

Present value of a perpetuity is an infinite and constant stream of identical cash flows.

PVGP

A

g

i

Precision

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