C$6-99.$ Sometimes it is not clear if a particular security is debt or equity. Suppose a corporation issues a perpetual

bond with interest payable solely from corporate income if$,$ and only if$,$ earned. Do you think this security is actually

debt or equity? What are the issues here?

$5-46.$ Suppose you are going to receive $$13,500$ per year for five years. The appropriate discount rate is $5\mathrm{.}5$ percent.

$(1)$ What is the present value of the payments if they are in the form of an ordinary annuity? $(2)$ What is the present

value if the payments are an annuity due?

$5-11.$ The Maybe Pay Life Insurance Co$.$ is trying to sell you an investment policy that will pay you and your heirs

$$30,000$ per year forever. Suppose a sales associate told you the policy costs $$525,000.$ At what interest rate would

this be a fair deal?