ttps://edugen.wileyplus.com/edugen/student/mainfr.uni SParrino, Fundamentals of

Question

ttps://edugen.wileyplus.com/edugen/student/mainfr.uni SParrino, Fundamentals of Corporate Finance, 3e Assignment Gradebook ORION Downloadable eTextbook NEXT Problem 8.7 Ten-yea similar bonds in the market yield 10.38 percent, what is the value of these bonds? (Round intermediate r zero coupon bonds issued by the U.S. Treasury have a face value of $1,000 and interest is compounded e.g. 1.25145 and final answer to 2 decimal places, e.g. 15.25.) semiannually. If Value of bond By accessing this Question Assistance, you will learn while you earn points based on the Point Potential Policy set by your instructor. Question Attempts: 0 of 3 used SAVE FOR LATER Earn Maximum Points available only if you answer this question correctly in two attempts or less

Explanation / Answer

1+ yeild to maturity = (face value / Price )^1/n yeild to maturity =10.38% Annualy Semi annual yeild =10.38%*1/2 =5.19% Face value =$1000 n= Compounding periods =2*10 =20 1+5.19% = ($1000/price)^1/20 price ^1/20 = ($1000^1/20) /1.0519 price ^1/20 =$1000^0.05 /1.0519 Price ^1/20 =1.412538/1.0519 Price =1.342844^20 price =363.51 Price of zero coupon Bond =$363.51

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.