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PERPETUITY

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November 8, 2014 at 6:17 pm #208462
javed
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SIR,
AM CO WILL RECEIVE A PERPETUITY STARTING IN 2 YEARS TIME OF 10,000 PER ANNUM,INCREASING BY THE RATE OF INFLATION 2%.
WHAT IS THE PERPETUITY ASSUMING A MONEY COST OF CAPITAL OF 10.2%?
MY QUESTION IS WHY THEY USED REAL COST OF CAPITAL IN THE ANSWER?
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