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Find value of perpetuities for long-term interest rate

British government 4.7% perpetuities pay £4.7 interest each year forever. Another bond, 3.2% perpetuities, pays £3.2 a year forever.

A.What is the value of 4.7% perpetuities if the long-term interest rate is 6.7%?

B.What is the value of 3.2% perpetuities?

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Finance Basics: Find value of perpetuities for long-term interest rate

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Solution Preview :

Prepared by a verified Expert

Finance Basics: Find value of perpetuities for long-term interest rate

Reference No:- TGS0559203

Have a Question? (oR Write a Review)

Recent Questions Asked Finance Basics

Q : After-tax preferred yield for selten

Q : Projected value of the card

Q : Inventory account reflects the cost of goods

Q : Expected change in firm stock price

Q : Find value of perpetuities for long-term interest rate

Q : Compute the profit margin on sales

Q : Calculate the total amount of cash and cash equivalents

Q : Determine net purchases and ending inventory

Q : Calculate the social security taxes

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Solution Preview :

Prepared by a verified Expert

Finance Basics: Find value of perpetuities for long-term interest rate

Reference No:- TGS0559203

Recent Questions Asked Finance Basics

Q : After-tax preferred yield for selten

Q : Projected value of the card

Q : Inventory account reflects the cost of goods

Q : Expected change in firm stock price

Q : Find value of perpetuities for long-term interest rate

Q : Compute the profit margin on sales

Q : Calculate the total amount of cash and cash equivalents

Q : Determine net purchases and ending inventory

Q : Calculate the social security taxes

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