Determine how much you would be willing to pay for a bond


1. The earnings of Omega Supply Company have grown from $2.00 per share to $4.00 per share over a 9 year time period. Determine the compound annual growth rate.

2. Determine how much you would be willing to pay for a bond that pays $6000 annual interest indefinitely and nevermatures (i.e., a perpetuity), assuming you require an 8.5 percent rate of return on this investment.

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Basic Statistics: Determine how much you would be willing to pay for a bond
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