Problem 5-25 Perpetuities (LO3) British government 4.9% perpetuities pay 4.9 interest at the end of...
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Problem 5-25 Perpetuities (LO3) British government 4.9% perpetuities pay 4.9 interest at the end of each year forever. Another bond, 3.4% perpetuities, pays 3.40 a year forever. a. What is the value of 4.9% perpetuities if the long-term interest rate is 6.9%? (Round your answer to 2 decimal places.) Perpetuity value b. What is the value of 3.4% perpetuities? (Round your answer to 2 decimal places.) Perpetuity value
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