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Finance[growingperpetuity] - present value of a growing perpetuity
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Calling Sequence
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growingperpetuity(cash, rate, growth)
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Parameters
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cash
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amount the perpetuity will pay one period from now
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rate
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interest rate
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nperiods
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growth rate in the payments
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Description
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The function growingperpetuity() computes the present value of a perpetuity paying the amount ``cash'' one period from now, with increasing payments at the end of each periods. The payments increase according to the ``growth'' rate.
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The command with(Finance,growingperpetuity) allows the use of the abbreviated form of this command.
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Since growingperpetuity used to be part of the (now deprecated) finance package, for compatibility with older worksheets, this command can also be called using finance[growingperpetuity]. However, it is recommended that you use the superseding package name, Finance, instead: Finance[growingperpetuity].
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Compatibility
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The Finance[growingperpetuity] command was introduced in Maple 15.
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Examples
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I hold some shares of the XYZ company. I will receive dividends each year. The next dividend is expected to be 1.5 U per share, one year from now. The yearly dividends are expected to increase by 2% per year, for the foreseeable future What is the present value, per share, of the dividend payments, given that the discount rate is 11%?
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