Determine the value of these bonds

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The State of Adaven issued $50 million of perpetual bonds in 1990. The bonds were issued in $1000 denominations with an annual coupon interest rate of 5%. Determine the value of these bonds today to an investor who requires a 10% return on his investment.

A) $25
B) $10
C) $500
D) $50

 

Reference no: EM13257940

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