What is the value of a consol that pays $100 per year if the required rate of return is 8%?
A) $800
B) $1000
C) $1250
D) $1500

Name: What is the value of a consol that pays $100 per year if the required rate of return is 8%? A) $800 B) $1000 C) $1250 D) $1500
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Question

Quizplus · Accepted Answer

The value of a consol is calculated by dividing the annual payment by the required rate of return. Here, $100 / 0.08 = $1250.

What Is the Value of a Consol That Pays $100