Insert the information in the form and the calculator will determine the value of prepetuity.


What is the value of prepetuity?


The present value of growing perpetuity is the cash flow that is projected to be received indefinitely and grow at the same pace indefinitely.


How to calculate value of prepetuity?


To calculate value of prepetuity you should use the following formula:
present value of growing prepetuity = c / ((r / 100) - (g / 100))
where:
c = cash flow
r = discount rate
g = growth rate


example: company x made $500,000 in year 7 and the cost of capital of this company is 9% and a long term growth rate of 4%, find the value of perpetuity?

present value of prepetuity = (cash flow year 7 (1 + 9)) / (r - g)
present value of prepetuity = ($500,000 * 1.04) / (0.09 - 0.04)
present value of prepetuity = $10,400,000

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