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The timing strategy becomes more attractive as interest rates (i.e., rates of return)increase.
Annuity
A level stream of cash flows for a fixed period of time.
Preferred Stock Dividends
Dividends that are paid to preferred stockholders before any dividends are paid to common stockholders.
Perpetuity
A type of annuity that pays an infinite series of cash flows, with the first payment occurring one period from now, indefinitely into the future.
Future Value Factor
A multiplier used to calculate the estimated future value of a current investment or cash flow at a specified rate of return.
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