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British government 4.2% perpetuities pay 4.2 interest at the end of each year forever. Another bond, 2.7% perpetuities, pays 2.70 a year forever. a. What

British government 4.2% perpetuities pay 4.2 interest at the end of each year forever. Another bond, 2.7% perpetuities, pays 2.70 a year forever.

a. What is the value of 4.2% perpetuities if the long-term interest rate is 6.2%? (Round your answer to 2 decimal places.)

Perpetuity value =

b. What is the value of 2.70% perpetuities? (Round your answer to 2 decimal places.)

Perpetuity value =

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