A perpetuity pays $50/year forever at a 10% discount rate. What's it worth, and how do you use this in a case?

How to answer

Perpetuity value = cash flow / rate = $50 / 0.10 = $500. In cases I use it as a fast proxy for terminal value or a steady-state business - valuing a stable cash stream in seconds. If cash flow grows at g, I switch to cash flow / (r - g).

Key idea: Multiplying instead of dividing, or forgetting the growing-perpetuity adjustment r - g when cash flows aren't flat.