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# value of consol bond

 Posts: 1,232 Add as FriendChallenge to a DebateSend a Message 10/15/2012 9:01:01 PMPosted: 5 years agoHey guys I need a little help on my homework.What is the value of a consol bond before any payment?This bond pays 400 a year forever and has an interest rate of 8%
 Posts: 11,204 Add as FriendChallenge to a DebateSend a Message 10/15/2012 10:28:01 PMPosted: 5 years agoValue of consol bond = (Cash flow)/(interest rate) = 400/.08 = \$5000.Open borders debate: http://www.debate.org...
 Posts: 1,232 Add as FriendChallenge to a DebateSend a Message 10/15/2012 10:51:28 PMPosted: 5 years agoAt 10/15/2012 10:28:01 PM, darkkermit wrote:Value of consol bond = (Cash flow)/(interest rate) = 400/.08 = \$5000.I tried that the answer was wrong.That was my answer for after the first payment
 Posts: 11,204 Add as FriendChallenge to a DebateSend a Message 10/15/2012 10:58:09 PMPosted: 5 years agoAt 10/15/2012 10:51:28 PM, Loserboi wrote:At 10/15/2012 10:28:01 PM, darkkermit wrote:Value of consol bond = (Cash flow)/(interest rate) = 400/.08 = \$5000.I tried that the answer was wrong.That was my answer for after the first paymentwhat's the answer then? Also doesn't the price remain the same regardless of how many payments have been made. The only thing that would effect its price is changes in the interest rate, not change in time.Open borders debate: http://www.debate.org...
 Posts: 6,362 Add as FriendChallenge to a DebateSend a Message 10/15/2012 11:21:52 PMPosted: 5 years agoAt 10/15/2012 10:58:09 PM, darkkermit wrote:At 10/15/2012 10:51:28 PM, Loserboi wrote:At 10/15/2012 10:28:01 PM, darkkermit wrote:Value of consol bond = (Cash flow)/(interest rate) = 400/.08 = \$5000.I tried that the answer was wrong.That was my answer for after the first paymentwhat's the answer then? Also doesn't the price remain the same regardless of how many payments have been made. The only thing that would effect its price is changes in the interest rate, not change in time.From what I know about consols, I don't see how that answer can be wrong.I didn't order assholes with my whiskey.
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