The present value of a perpetual bond is = annual coupon payment/discount rate
The discount rate = yield = 20% =0.2
Annual coupon payment =$100
Present value of the bond = 100/0.2 = 500
So the present value of the bond is the value that you would end up paying for the bond.
Hence you would pay $500.00 for a bond that pays an annual perpetual coupon of $100 with a yield of 20%
