The British government has a consol bond outstanding paying £100 per year forever. Assume the current interest rate is 12% per year.
a. What is the value of the bond immediately after a payment is? made?
The value of the bond immediately after a payment is made is ? (round to the nearest pound)
b. What is the value of the bond immediately before a payment is? made?
The value of the bond immediately before a payment is made is ? (round to the nearest pound)