Growing perpetuity factor: Difference between revisions
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(GPF). | (GPF). | ||
A growing perpetuity factor is the fraction 1/(r-g), used when evaluating a growing perpetuity. | A growing perpetuity factor is the fraction '''1/(r-g)''', used when evaluating a growing perpetuity. | ||
Using this simple formula assumes a constant periodic cost of capital (r) for all periods from now to infinity. | Using this simple formula assumes a constant periodic cost of capital (r) for all periods from now to infinity. | ||
Revision as of 11:07, 7 April 2021
Financial maths.
(GPF).
A growing perpetuity factor is the fraction 1/(r-g), used when evaluating a growing perpetuity.
Using this simple formula assumes a constant periodic cost of capital (r) for all periods from now to infinity.
It als assumes a constant compound rate of growth (g) from the first cashflow to infinity.
Sometimes known as the Growing perpetuity formula.
