Hello Sir, can you assist? I am trying to understand why in example 1 on page 76 in the notes in working out the perpetuity, 12.168 was divided by .1 - .04.
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Cash based valuation methods
8y ago#1It is an inflating perpetuity and so we use the dividend valuation formula.
The dividend valuation formula will give the present value of any inflating perpetuity (not just the market value of shares when we are using the inflating dividend flows).
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