Consol Bonds. Perpetual Life Corp. has issued consol bonds with coupon payments of $80. (Consols pay interest

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Consol Bonds. Perpetual Life Corp. has issued consol bonds with coupon payments of $80.

(Consols pay interest forever, and never mature. They are perpetuities.) If the required rate of return on these bonds at the time they were issued was 8 percent, at what price were they sold to the public? If the required return today is 12 percent, at what price do the consols sell?

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Study Guide To Accompany Fundamentals Of Corporate Finance

ISBN: 9780073012421

5th Edition

Authors: Richard Brealey, Stewart Myers, Alan Marcus

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