The British government has a consol bond outstanding paying £100 per year forever. Assume the current interest rate is 8% per year. a. What is the value of the bond immediately after a payment is made? b. What is the value of the bond immediately before a payment is made? a. What is the value of the bond immediately after a payment is made? The value of the bond immediately after a payment is made is £ . (Round to the nearest pound.) b. What is the value of the bond immediately before a payment is made? The value of the bond immediately before a payment is made is £ . (Round to the nearest pound.)

The British government has a consol bond outstanding paying £100 per year forever. Assume the current interest rate is 8% per year. a. What is the value of the bond immediately after a payment is made? b. What is the value of the bond immediately before a payment is made? a. What is the value of the bond immediately after a payment is made? The value of the bond immediately after a payment is made is £ . (Round to the nearest pound.) b. What is the value of the bond immediately before a payment is made? The value of the bond immediately before a payment is made is £ . (Round to the nearest pound.)

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 11P

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