Monday 17 February 2020

A perpetuity that begins in 2 years will pay a coupon $10/year and is scheduled to be priced

A perpetuity that begins in 2 years will pay a coupon $10/year and is scheduled to be priced at $200. What is the current value of the instrument if the 2 year interest rate is 7%? What is the interest rate of the perpetuity?

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