What is a Perpetuity?
A perpetuity is a type of annuity that pays a constant cash flow forever. Its present value can be calculated
by dividing the annual cash flow by the discount rate (as a decimal).
Why Use This Calculator?
- 💰 Simplify Valuation: Useful for valuing perpetual cash flows like preferred stocks or
endowments.
- 📉 Understand Rate Impact: See how discount rates affect valuation.
- ⚙️ Instant Results: Quick and clear result for financial decision-making.
How to Calculate Perpetuity Value
- Annual Cash Flow: Enter the recurring cash inflow.
- Discount Rate: Enter the expected return rate (in %).
- Click “Calculate Perpetuity Value” to get the result.
Who Uses This?
Financial analysts, investors, and economists often use perpetuity models for valuations in corporate finance
and investment analysis.
Read more about
Perpetuity.
