You are the Chief Financial Officer of Toujours SA, a company listed on the Paris stock exchange. You would like to issue perpetual debt; that is a bond which makes one coupon payment at the end of every year forever. The market yield on similar bonds is 4%. If you seek to raise €1.0bn from the bond, what will the coupon payment be every year?       a €10m   b €40m   c I do not want to answer this question.   d €100m   e €400m   f More information is needed to answer the question.

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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You are the Chief Financial Officer of Toujours SA, a company listed on the Paris stock exchange. You would like to issue perpetual debt; that is a bond which makes one coupon payment at the end of every year forever. The market yield on similar bonds is 4%. If you seek to raise €1.0bn from the bond, what will the coupon payment be every year?
 

 
 
  • a
    €10m
     
  • b
    €40m
     
  • c
    I do not want to answer this question.
     
  • d
    €100m
     
  • e
    €400m
     
  • f
    More information is needed to answer the question.
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