An Equal Stream of Payments That Lasts Forever Is

question 27

Multiple Choice

An equal stream of payments that lasts forever is:

• A) a growing annuity.
• B) a zero-coupon bond.
• C) a perpetuity.
• D) valueless.

---

Definitions:

Financial Statements

Official records that detail the financial activities and condition of a business, including income statement, balance sheet, and cash flow statement.

Retained Earnings

The portion of a business’s profits not distributed to shareholders, instead reinvested in the business or kept for reserve.

Cash Dividends

Payments made by a corporation to its shareholder members in the form of cash.

Stock Dividends

A dividend payment made to shareholders in the form of additional shares rather than cash.