A company decided to issue a perpetual bond (a bond with a never ending interest...
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Finance
A company decided to issue a perpetual bond (a bond with a never ending interest payment and no maturity date). The bond will pay $80 in interest each year (at the end of the year), but it will never return the principal. The current discount rate for the bond is 7%. What should this bond sell for in the market?
a. $984.96 b. $1,091.73
c. $1,142.86 d. $1,235.79
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