悉尼大学资本市场与公司财务课件Lecture3.pptVIP

Perpetuity A perpetuity is a special case of an annuity – it is an annuity that continues indefinitely The formula for the present value of a perpetuity is: Growing Perpetuity In some applications, the periodic cash flows (A) may grow by a constant rate (g) each year The PV of the perpetuity under this condition is Where A1 is the cash flow at the end of the first year A1 = A0(1+g) Constant dividend growth model Example 3.4 In the year ended December 2007, National Australia Bank generated EPS of 269 cents, paid a dividend of 182 cents per share, and its ROE was estimated at 17%.