Federal Bank is issuing a growing perpetual bond with a face value of Rs. 1000. The interest amount for the first year is Rs. 40 and the interest amount will increase by 0.25% every year subsequently. What is the fair value of bond? Rs. 1000.00 Rs. 1066.67 Rs. 1666.67 Infinity
Federal Bank is issuing a growing perpetual bond with a face value of Rs. 1000. The interest amount for the first year is Rs. 40 and the interest amount will increase by 0.25% every year subsequently. What is the fair value of bond? Rs. 1000.00 Rs. 1066.67 Rs. 1666.67 Infinity
Chapter8: Analysis Of Risk And Return
Section: Chapter Questions
Problem 9P
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Federal Bank is issuing a growing perpetual bond with a face value of Rs. 1000. The interest amount for the first year is Rs. 40 and the interest amount will increase by 0.25% every year subsequently. What is the fair
Rs. 1000.00
Rs. 1066.67
Rs. 1666.67
Infinity
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