British government 4% perpetuities pay 4 interest each year forever. Another bond, 2.5% perpetuities, pays 2.50 a
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British government 4% perpetuities pay £4 interest each year forever. Another bond, 2.5% perpetuities, pays £2.50 a year forever.
a. What is the value of 4% perpetuities if the long-term interest rate is 6%?
b. What is the value of 2.5% perpetuities?
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Related Book For
Fundamentals of Corporate Finance
ISBN: 978-1259722615
9th edition
Authors: Richard Brealey, Stewart Myers, Alan Marcus
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