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You are investing a perpetual bond which will pay you $100 in coupons in one year, $125 in coupons in two years and $135 in
You are investing a perpetual bond which will pay you $100 in coupons in one year, $125 in coupons in two years and $135 in three years. After year three, the bonds coupon will increase by 1.4% per year forever. The discount rate for this bond is 5% per annum. How much is the bond worth today?
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