Question: This question is not cumulative [ 8 marks ] ( a ) Perpetual Corp. has issued consol bonds with annual coupon payments of $ 5

This question is not cumulative
[8 marks]
(a) Perpetual Corp. has issued consol bonds with annual coupon payments of $50. If the required rate of return on these bonds at the time they were issued was 5 percent, at what price were they sold to the public? If the required return today is 10 percent, at what price do the consols sell?
(b) A pure discount bond has 10 years until maturity and will pay $1,000 at maturity. If the YTM is 15%, what is the current price of this pure discount bond?
This question is not cumulative [ 8 marks ] ( a )

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