bb9.govst edu My Institution w Question Completion Status: all of the above. 1 p

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bb9.govst edu My Institution w Question Completion Status: all of the above. 1 points Save Answer QUESTION 10 Corporation is issuing zero-ooupon bond that wa have amaturity of fifty years. The bond's par value is $1,000, the current yield on a What is the expected price of this bond, using the semiannual and similar bonds is 7,5%. convention? O $25.19 $250.19 $750,000 $1,000.00 1 points Save Answer QUESTION 11 The key inputs to the valuation process include C) retums and risk. cash flow, cash now timing and risk. cash flows and discount rata, retums, discount rate, and risk.

Explanation / Answer

Ans. 10.

Current Price of Zero Coupon Bond = Par Value / (1 + r) n

n = 50 x 2 = 100, r = 7.5 /2 = 3.75, Par Value = 1,000

Current Price = 1,000 / (1 + 0.0375) 100

Current Price =$25.19

So, the correct Option is A $25.19

Question 11.

B. Cash Flow, Cash Flow timing and Risk.

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