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Unformatted text preview: to the equation for a perpetuity: P = D/r __________ When using the perpetuity equation, we always find the value of the perpetuity one period before the first cash flow. Thus, if our first cash flow is at Year 13, we will find the value at Year 12: V 12 = CF 13 / r On the other hand, if our first cash flow takes place at Year 54, we will find the value at Year 53, etc.: V 53 = CF 54 / r Where r is the appropriate discount rate to apply to the cash flows....
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 Spring '06
 Tapley
 Finance

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