Perpetuity

In finance, 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. For example, the United Kingdom (UK) government issued them in the past; these were known as consols and were all finally redeemed in 2015.

For the sculpture, see Perpetuity (sculpture).

Real estate and preferred stock are among some types of investments that affect 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 can be structured as a perpetual bond and are a form of ordinary annuities. The concept is closely linked to terminal value and terminal growth rate in valuation.

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