Perpetuity

For the sculpture, see Perpetuity (sculpture).
For the legal doctrine, see Rule against perpetuities.

In finance, a perpetuity is an annuity with payments that continue indefinitely.

Perpetuity formulas are used in time value of money and discounted cash flow valuation. Common applications include valuing shares under the dividend discount model, estimating terminal value in company valuation, and capitalising stabilised income in real estate appraisal.

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