The current discount rate for canadian government bonds is


The Canadian Government has once a gain decided to issue a consol (a bond with a never- ending interest payment and no maturity date). The bond will pay $40 in interest each year (at the end of the year) but never return the principal. The current discount rate for Canadian government bonds is 7.5%. What should this bond sell for in the market?

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Financial Management: The current discount rate for canadian government bonds is
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