What will be the rate of return on a perpetual bond with a $1,000 par value, an

Question:

What will be the rate of return on a perpetual bond with a $1,000 par value, an 8 percent coupon rate, and a current market price of?

(a) $600,

(b) $800,

(d) $1,500?

Assume that interest is paid annually.

Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a...