5. Huda is considering for purchasing a bond that pays $850 annually and will not cease,...
Homework Answers
Amount paid per year in perpetuity = $850
Rate of interest = 5%
Value of Perpetual bond = Annual income/Interest
Rate
850/5%
$17,000
So you should pay $17000 for the bond.
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5. Huda is considering for purchasing a bond that pays $850
annually and will not cease,...
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