Perpetuity Value Calculator
V = C / r — present value of an infinite stream of equal cash flows.
Result
Perpetuity value
$20,000.00
Simple perpetuity.
- Cash flow$1,000.00
- Discount rate5.00%
- Growth rate0.00%
- Effective denominator0.0500
- Value$20,000.00
Step-by-step
- V = C / r = 1000 / 0.05 = $20,000.00.
How to use this calculator
- Enter the periodic cash flow C.
- Enter discount rate r.
- For growing perpetuity, enter growth rate g (must be less than r).
About this calculator
A perpetuity is an infinite stream of equal cash flows. PV = C / r. For a "growing perpetuity" with growth rate g < r, PV = C / (r − g) — this is the Gordon growth model used to value stocks. The smaller the gap (r − g), the higher the value, which is why high-growth companies sell at high multiples.
Frequently asked
Mathematically: if g ≥ r, the geometric series diverges — value would be infinite. Economically: no finite-rate cash flow can grow faster than its required return forever.
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