A perpetuity has a cash flow of ₹625 and a required rate of return of 8%. If the cash flow is expected to grow at a constant rate of 4% per year,…

CA Foundation · Quantitative Aptitude · MTP · January 2026
A perpetuity has a cash flow of ₹625 and a required rate of return of 8%. If the cash flow is expected to grow at a constant rate of 4% per year, then the intrinsic value of this perpetuity (present value of growing perpetuity) is;
(A) A. ₹15,625
(B) B. ₹13,000
(C) C. ₹14,250
(D) D. ₹16,667

Suggested Answer and Working Notes:

Correct Answer: Option (A)

A. ₹15,625

Topics: Part-A: Business Mathematics

Open in Interactive Practice Hub · Full Practice Hub · Chapter Weightage · More in this subject

Related Questions in this Topic