Which of the Following Statements Regarding Growing Perpetuities Is FALSE $$\text { D) PV of a growing perpetuity } = \frac { C } { r - g }$$

question 55

Multiple Choice

Which of the following statements regarding growing perpetuities is FALSE?

• A) We assume that r < g for a growing perpetuity.
• B) A growing perpetuity is a cash flow stream that occurs at regular intervals and grows at a constant rate forever.
• C) To find the value of a growing perpetuity one cash flow at a time would take forever.
• \[\text { D) PV of a growing perpetuity } = \frac { C } { r - g }\]

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Definitions:

Growth Factors

Elements or conditions that stimulate development or expansion, particularly in economic or biological contexts.

Chattanooga

A city in southeastern Tennessee, known for its rich history, scenic beauty, and economic significance.

50th Percentile

A statistical measure indicating the value below which 50% of observations in a group fall.

Geometric Mean

The nth root of the product of n numbers, useful for determining the average rate of return over time.