Business, 10.12.2020 16:20, jdjdjdjdjjffi7273

Making the assumption of no compounding interest, suppose you purchase a perpetuity bond from CosoNostra Pizza Inc. for $4,000 with an annual coupon rate of 3% . Specify all answers to the nearest dollar, and assume a discount rate equal to that of the current interest rate. Required:
a. What is the yearly return on your $4,000 investment?
b. Changes in the economy push interest rates up from 3% to 5%. For how much can you sell your bond following this change in market interest rates?
c. Suppose that interest rates instead change from 3% to 1%. For what price will you be able to sell your bond following this change in market interest rates?

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Making the assumption of no compounding interest, suppose you purchase a perpetuity bond from CosoNo...