Perpetuity (Infinite Annuity) Calculator

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Finance

Perpetuity Calculator finds the present value of an infinite stream of equal cash flows. Formula: PV = PMT / r. Used for dividend discount model and valuing preferred stocks.

Formula

PV = PMT / r
  • PV = annual payment ÷ discount rate
  • Assumes infinite equal payments

Example

Inputs
  • Annual Payment / Dividend: 1000 $
  • Discount Rate (Annual %): 5 %

$1000/year at 5% = $20,000 PV

Frequently asked questions

What is perpetuity?
Infinite stream of equal cash flows (e.g., preferred stock dividends)
Why is it important?
Values stocks and bonds without forecasting every future year