In the fixed income world, duration is defined as the percentage change in price of the bond when there is a change in one percentage change in interest rate. What is the duration of a perpetual bond? I shall not go into differentiation equation but would demonstrate it with just a very simple example. Initially when the bond is issued, it is issued at par with a coupon (assuming annual coupon for simplicity) of C. Let's say the coupon rate is 5%. So C = $5 for par $100. Over time, the value of the bond is P = $5 / R where R is the discount rate. If R = 5%, P = $100 which is the par value. If the interest rate goes up by 100 bps (assuming paralleled shift in the yield curve), P = $5/6% = $83.33. The % change in price of the bond ......