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If a $1,000 Perpetuity Bond Has a Coupon Rate of 11

Question 224

Multiple Choice

If a $1,000 perpetuity bond has a coupon rate of 11% and the market interest rate falls to 7%, what would a person expect to pay for that bond?

A) $636.36
B) $1,000
C) $1,371.33
D) $1,571.43

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