The British government pays 3.2% perpetual payments, 3.2 interest at the end of each year forever. Another
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The British government pays 3.2% perpetual payments, £3.2 interest at the end of each year forever. Another bond pays £1.70 a year, with a maturity of 1.7%. |
| A. | If the long-term interest rate is 5.2%, what is the value of the 3.2% perpetuity? (Round your answer to 2 decimal places.) |
| lasting value | £ |
| B. | What is the value of 1.70% continuity? (Round your answer to 2 decimal places.) |
| lasting value | £ |
Expert Answer:
Related Book For 
Fundamentals Of Corporate Finance
ISBN: 9780135811603
5th Edition
Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford
Posted Date:
