shootingstar

optiix Wrote:
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> I see big confusion here. Let's make it clear.
> Perpetuity starts at the end of the 4 year, but we
> have to discount with N = 3 because perpetuity
> formula would find value ot the perpetuity at the
> end of year 3. This is the same as with simplest
> perpetuity, which starts at the end of first year
> and we find the value of perpetuity at the time 0
> by using perpetuity formula. And time 0 is one
> period earlier than the end of 1 year (when
> perpetuity starts). This is crucial.

Actually it starts 4 years from now, meaning at the end of year 3 ( now is year 0)