Perpetual Life Corp. has issued consol bonds with coupon payments of $90. (Consols pay interest forever and
Fantastic news! We've Found the answer you've been seeking!
Question:
| Perpetual Life Corp. has issued consol bonds with coupon payments of $90. (Consols pay interest forever and never mature. They are perpetuities.) |
| a. | If the required rate of return on these bonds at the time they were issued was 9%, at what price were they sold to the public? |
| Price sold to the public | $ |
| b. | If the required return today is 12%, at what price do the consols sell? |
| Current price | $ |
Expert Answer:
Posted Date:
