PV of Perpetuity = — r where A is the perpetuity. The most common example offered for a perpetuity is a console bon. A console bond is a bond that has no maturity and pays a fixed coupon. Assume that you have a 6% coupon console bond. The value of this bond, if the interest rate is 9%, is as follows:

The value of a console bond will be equal to its face value (which is usually $1000) only if the coupon rate is equal to the interest rate.

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