Watch the video below on valuing bonds. It shows how to calculate a bonds value with an example of a $1,000 bond making $100 annual payments, when the interest rate is 8%. Would there be a point (length to maturity) where you would prefer to hold a perpetuity paying $100/year over a bond with a $100 payment?

http://www.teachmefinance.com/bondvaluation.html

Answer rating: 100% (QA)

Lets assume the rate of interest is same 8 for both bond and perpetu... View the full answer