A perpetuity is an annuity that has no end, or a stream of cash payments that continues forever. There are few actual perpetuities in existence (the United Kingdom (UK) government has issued them in the past; these are known and still trade as consols). Real estate and preferred stock are among some types of investments that effect the results of a perpetuity, and prices can be established using techniques for valuing a perpetuity. Perpetuities are but one of the time value of money methods for valuing financial assets. Perpetuities are a form of ordinary annuities.
The concept is closely linked to terminal value and terminal growth rate in valuation.
Read more about Perpetuity: Detailed Description, Real-life Examples
Famous quotes containing the word perpetuity:
“These semi-traitors [Union generals who were not hostile to slavery] must be watched.—Let us be careful who become army leaders in the reorganized army at the end of this Rebellion. The man who thinks that the perpetuity of slavery is essential to the existence of the Union, is unfit to be trusted. The deadliest enemy the Union has is slavery—in fact, its only enemy.”
—Rutherford Birchard Hayes (1822–1893)