Why is the formula for a perpetuity/consol useful for coupon bonds with long maturity?
A) It becomes tedious to calculate the present value of numerous coupon payments so the perpetuity formula is a good approximation.
B) It is unlikely that a person will still be alive to receive coupon payments in 50 years so the perpetuity formula is a good approximation.
C) The present value of coupon payments in the distant future is very small so the perpetuity formula is a good approximation.
D) I'm not really sure, that's just what you told us in class.