Question
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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Real Estate Finance
Authors: Sherry Shindler Price
1st Edition
0934772185, 9780934772181
