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Bradley is looking to purchase a consol bond (perpetuity) from the British Government. The bond pays $100 per year and is currently selling at $2,250. What is the assumed annual cost of capital of this bond?

Respuesta :

Answer:

Annual Cost of capital of this bond = Annual interest ÷ Bond price

                                              = $100 ÷ $2,250

                                             = 4.44%

Explanation:

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