Homework Question Finance

Business & Finance
Tutor: None Selected Time limit: 1 Day

Tom is issuing a series of zero coupon bonds to raise 500 Million to fund research. Each bond will have a face value of $1000 and will mature in 27 years. The yield on the bond is 8%. What is the fair price for one of Toms zero coupon bonds?

Jul 7th, 2015

Thank you for the opportunity to help you with your question!

the price = PV = 1000/1.08^27 = 125.19

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Jul 7th, 2015

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Jul 7th, 2015
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Jul 7th, 2015
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