Consider an 8-year 5% coupon bond that pays a $1,000 par value at maturity. Assume 6.4% to be the approriate disount rate.
1) What is the present value of the bond if it pays annual coupon?
2 )What is the present value of the bond if it pays semi-annual coupons?
3) Now assume that the bond is perpetual.What is the present value of the bond if it pays the same annual coupons forever? With steps please.