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Find value of consol bond that promises to pay amount

In Britain, there are Consol bonds that are perpetuity bonds. (In the United States, the IRS does not allow companies to deduct the interest payments on perpetual bonds, so U.S. corporations do not issue Consol bonds.) What is the value of a Consol bond that promises to pay $2,000 per year if the prevailing interest rate is 4%?

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Solution Preview :

Prepared by a verified Expert

Finance Basics: Find value of consol bond that promises to pay amount

Reference No:- TGS0554359

Have a Question? (oR Write a Review)

Recent Questions Asked Finance Basics

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Solution Preview :

Prepared by a verified Expert

Finance Basics: Find value of consol bond that promises to pay amount

Reference No:- TGS0554359

Recent Questions Asked Finance Basics

Q : Under what interest rates would prefer a perpetuity

Q : Gull current income tax expense or benefit

Q : Actual cash flow and opportunity cost expenses

Q : What would be the corporation current earnings

Q : Find value of consol bond that promises to pay amount

Q : What is the value of the patenting contract

Q : The corporation''s current earnings and profits

Q : What is the monthly payment on a mortgage

Q : Australias non indigenous population

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