16. Duration (S3.2) The formula for the duration of a perpetual bond that makes an equal payment...

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16. Duration (S3.2) The formula for the duration of a perpetual bond that makes an equal payment each year in perpetuity is (1 + yield)/yield. If each bond yields 5%, which has the longer duration—a perpetual bond or a 15-year zero-coupon bond? What if the yield is 10%?

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Principles Of Corporate Finance

ISBN: 9781264080946

14th Edition

Authors: Richard Brealey, Stewart Myers, Franklin Allen, Alex Edmans

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