That's what the 4% is. A perpetuity that pays out $6000 a year is valued at $150,000 assuming a 4% discount rate. Without a discount rate, the value of any perp

That's what the 4% is. A perpetuity that pays out $6000 a year is valued at $150,000 assuming a 4% discount rate. Without a discount rate, the value of any perpetuity would be infinity.