Question
2. Sharon Smith will receive $1 million in 30 years. As an alternative, she can receive $90,000 today. If we use a discount rate of
2. Sharon Smith will receive $1 million in 30 years. As an alternative, she can receive $90,000 today. If we use a discount rate of 8%, which should she choose?
3. Yesterday Google issued 20 Year bonds with a 5% Interest Rate/Coupon when the required rate of return or yield to maturity was 5%. Today, investors are requiring an 8% return or yield to maturity. What will be the new market price of the bond?
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The New Public Finance
Authors: Inge Kaul, Pedro Condeicao
1st Edition
0195179978, 978-0195179972
