the.com/perpetuity
A cash flow that never RSVPs no and never stops showing up.
means A sum of money paid forever, at regular intervals, with no end date.
from From Latin perpetuitas, 'continuous duration,' built from perpetuus — 'continuous, unbroken' — fusing per ('through') with a root related to petere ('to seek, go toward'). The sense is of something that goes all the way through time without stopping. It entered English in the 14th century via French, first for the abstract idea of endlessness, later specialized by lawyers and financiers into a technical term for payments that, on paper at least, never stop coming.
- value formula
- payment divided by discount rate, nothing fancier
- british bonds
- consols literally paid interest forever, no maturity
- growing version
- gordon growth model prices stocks as perpetuities
- infinite sum
- converges to a finite number if rate exceeds growth