Pure discount bonds and perpetuities can be viewed as the polar cases of bonds. The value of

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Pure discount bonds and perpetuities can be viewed as the polar cases of bonds. The value of a pure discount bond (also called a zero coupon bond, or simply a zero) is:

PV l





F

( R)T The value of a perpetuity (also called a consol) is:

PV 

C R LO.1

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Corporate Finance

ISBN: 9780073105901

8th Edition

Authors: Jeffrey Jaffe, Bradford D Jordan

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