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British government 4% perpetuities pay 4 interest each year forever. Another bond, 5.5% perpetuities, pays 5.5 a year forever. a. What is the value of
British government 4% perpetuities pay 4 interest each year forever. Another bond, 5.5% perpetuities, pays 5.5 a year forever. a. What is the value of 4% perpetuities if the long-term interest rate is 3.5% ? (Round your answer to 2 decimal places.) b. What is the value of 5.5% perpetuities if the long-term interest rate is 3.5% ? (Round your answer to 2 decimal places.)
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