What is the value of a consol bond

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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%?

Reference no: EM131234014

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