Perpetual Bond EXample Bond P has a $1,000 face value and provides an 8%coupon. The appropriate discount rate is 10%. What is the value of the perpetual bond? 1=$1,000(8%)=$80 d=10% V =l/kd [Reduced Form =$80/10%〓$800 4-104-10 Perpetual Bond Example Bond P has a $1,000 face value and provides an 8% coupon. The appropriate discount rate is 10%. What is the value of the perpetual bond? I = $1,000 ( 8%) = $80. kd = 10%. V = I / kd [Reduced Form] = $80 / 10% = $800