Perpetuity Calculator
This calculator computes the present value of a perpetuity, a stream of equal or growing payments that continues forever. Enter the annual payment, the discount rate, and optionally a growth rate. The calculator shows what an infinite payment stream is worth in today's dollars. Use this for valuing preferred stocks, perpetual bonds, or dividend-growth models.
Perpetuity formulas
Simple Perpetuity: PV = PMT / r
Growing Perpetuity: PV = PMT / (r - g)
where PMT = payment, r = discount rate, g = growth rate
(Growth rate must be less than discount rate)
How to use this calculator
- Enter the annual payment amount in "Annual payment".
- Enter your required rate of return (discount rate) in "Discount rate".
- If payments grow annually, enter the growth rate in "Growth rate". Otherwise, leave it as 0 for a simple perpetuity.
- The calculator shows the present value of the infinite payment stream.
Perpetuity examples
Simple perpetuity: Preferred stock paying a fixed dividend of 4 dollars per year, discounted at 8%, is worth 4 / 0.08 = 50 dollars per share.
Growing perpetuity: A company's stock paying a 2 dollar dividend, growing at 5% annually, discounted at 10%, is worth 2 / (0.10 - 0.05) = 40 dollars per share.
Perpetuity calculator: frequently asked questions
What is a perpetuity?
A perpetuity is a series of equal payments that continue forever. Examples include preferred stock dividends, some annuities, or bond coupons that never mature.
What is a growing perpetuity?
A growing perpetuity is a perpetuity where payments grow at a constant rate. For example, dividends that increase 3% annually forever. It accounts for inflation and company growth.
How can an infinite payment have a finite value?
Distant future payments are worth very little in today's dollars. Discounting converts all future payments to present value, resulting in a finite sum.
When do I use this calculator?
Use it to value preferred stock, perpetual bonds, long-term dividend-paying stocks, or any asset with indefinite payouts.
What if the growth rate equals the discount rate?
If they are equal, the perpetuity is undefined (infinite value). The growth rate must be less than the discount rate for a finite value.
Official sources
- U.S. Securities and Exchange Commission: Investor Education.
Reviewed by the CalculatorHub team, edited by James Graham, 14 June 2026. See our methodology.