British government 4.8% perpetuities pay £4.8 interest at the end of each year forever. Another bond, 3.3% perpetuities, pays £3.30 a year forever. |
a. |
What is the value of 4.8% perpetuities if the long-term interest rate is 6.8%? (Round your answer to 2 decimal places.) |
Perpetuity value | £ |
b. | What is the value of 3.30% perpetuities? (Round your answer to 2 decimal places.) |
Perpetuity value | £ |
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British government 4.8% perpetuities pay £4.8 interest at the end of each year forever. Another bond,...
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