An investment of $210 produces a perpetual stream of cash inflows. Next year, the cash inflow will be $10.50, and the cash inflow will grow at 5% per year. What is the internal rate of return on this investment?

You can use the "constant-growth" model, appropriately rearranged, to solve for the internal yield r:



... where denotes the asset's present value; is the expected cash flow one period away; and r and g are the asset's yield and cash-flow growth rate, respectively.