1. If you buy consols, which provides you interest 200 forever, what is present value of all the future cash flow (the p

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1 If You Buy Consols Which Provides You Interest 200 Forever What Is Present Value Of All The Future Cash Flow The P 1 (32.85 KiB) Viewed 51 times

1. If you buy consols, which provides you interest 200 forever, what is present value of all the future cash flow (the price of consols )? The risk-free interest rate is 2%. (Required) 2. (Required) In-class 2 100 100(1+5%) 100 (1 + 5%)"-1 0 1 2 n If you buy consols, which provides the above cashflows, what is present value of all the future cash flow (the price of consols )? The risk-free interest rate is 7% PV(growing perpetuities)=100/(7%-5%)=5000