You have just been fired as CEO. As consolation the board of directors gives you a five

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You have just been fired as CEO. As consolation the board of directors gives you a five year consulting contract at $150,000 per year. What is the duration of this contract if your personal borrowing rate is 9 percent? Use duration to calculate the change in the contract’s present value for a .5 percent increase in your borrowing rate.

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Principles of Corporate Finance

ISBN: 978-0072869460

7th edition

Authors: Richard A. Brealey, Stewart C. Myers

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