The British government’s outstanding perpetual bonds have annual coupon payments of $25, payable annually. The market...

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The British government’s outstanding perpetual bonds have annual coupon payments of $25, payable annually. The market...

The British government’s outstanding perpetual bonds have annual coupon payments of $25, payable annually. The market interest rate today is 3.5 percent, at what price are you willing to buy these consols?

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Answer 1

Answer #1

Ans Price = $ 714.29

Price of bond = Dividend / Market Interest Rate

= 25 / 3.5%

= $ 714.29

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Answer 2

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The British government’s outstanding perpetual bonds have annual coupon payments of $25, payable annually. The market...

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Add Answer to: The British government’s outstanding perpetual bonds have annual coupon payments of $25, payable annually. The market...

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Add Answer to:
The British government’s outstanding perpetual bonds have annual coupon payments of $25, payable annually. The market...