Question

In: Finance

consolidated company needs to raise capital. its investment banker suggest that 20-year zero coupon bonds could...

consolidated company needs to raise capital. its investment banker suggest that 20-year zero coupon bonds could be sold at a yield to maturity of 8%. what is the market value of each zero coupon bond using the semi-annual formula?
a. $208.29
b. $224.54
c. $204.69
d. $218.52

jon has just issued a 20 year, 10% coupon rate, $1,000 par bond that pays interest semi-annually. the required return is currently 8 percent and the company is certain that it will remain at 8 percent until the bond matures in 20 years.
5 years later, what is the value of the bond with 15 years to maturity?
a. $1,125.84
b. $1,172.92
c. $1,261.68
d. $1,238.35

Solutions

Expert Solution

Question No.1 )

Option A is correct.

Calculation of the bond price :-

Question No 2)

Option B is correct.

jeff jeffy answered 2 years ago
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