Insert the information in the form and the calculator will determine the perpetuity.

What is the perpetuity?

Perpetuity is a type of annuity that lasts forever. And stream of cash flows continues for an infinite amount of time.

How to calculate perpetuity?

To calculate perpetuity you should use the following formula:
pv = c / (r / 100)
where:
pv = present value
c = cash flow
r = interest rate

example: company x pays $2.15 in dividends annually and estimates that the dividends will be payed indefinitely. How much are investors willing to pay for the dividend with a rate of return of 3%?

Using the perpetuity formula the anser will be:
pv = c / (r / 100)
pv = $2.15 / (3 / 100)
pv = $71.67

Why use perpetuity?

Perpetuity is useually used to find the present value of a company's cash flow when discounted back at a certain rate.