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Posted on Oct 19, 2024

28. Find the value of a British consol that pays $25 per year in perpetuity. The interest rate on investments of comparable risk is 5.2%.

29. What is the present value of an investment that will pay $100 per year forever if the required rate is 10%?

30. You have the opportunity to buy a perpetuity that pays $1,000 annually. Your required rate of return on this investment is 15 percent. What is the maximum that you should be willing to pay for this investment?

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