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What would you get if you grew perpetuity

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Reference no: EM132484072

Inflation is 3 % per year; the nominal interest rate is 11 % per year. Your perpetuity project has cash flows that grow at 1% faster than inflation forever, starting with $18 next year.

What would you get if you grew this perpetuity by the nominal growth rate, and then discounted it at the real (not nominal) cost of capital?

Reference no: EM132484072

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