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British government 6% perpetuities pay 6 interest each year forever. Another bond, 5% perpetuities, pays 5 a year forever. a. What is the value of

British government 6% perpetuities pay 6 interest each year forever. Another bond, 5% perpetuities, pays 5 a year forever.

a.
What is the value of 6% perpetuities if the long-term interest rate is 6.5%? (Round your answer to 2 decimal places.)

Perpetuity value

b. What is the value of 5% perpetuities? (Round your answer to 2 decimal places.)

Perpetuity value

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