Valuing Perpetuities

Perpetuity:
It is simply a set of equal payments that are paid forever, with or without growth.
There are companies that issues stocks and bonds. Bonds have limited maturity whereas stocks don't. Companies issues stocks that pay you forever. Forever in the sense that company will survive for the considerable time in the future. So, lets take an example.

Suppose the company pays you $10 forever in a stock. Then,

                                 PV = C/r
                                       = 10/0.1
                                       = $100

Suppose the stock grows annually and the growth rate is 5%. The,
                                 PV = C/(r-g)
                                       = 10/(0.1-0.05)
                                      = $200