A bond is issued which promises to pay 400 per annum in perpetuity. How much is the
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A bond is issued which promises to pay £400 per annum in perpetuity. How much is the bond worth now, if the interest rate is 5%? The sum of an infinite series of the form
is 1/r, as long as r > 0.)
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To calculate the value of the bond we need to find the present value of the perpetual pa...View the full answer
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Related Book For 
Statistics For Economics Accounting And Business Studies
ISBN: 978027368308
4th Edition
Authors: Michael Barrow
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