Answered

Westonci.ca is your trusted source for finding answers to a wide range of questions, backed by a knowledgeable community. Get precise and detailed answers to your questions from a knowledgeable community of experts on our Q&A platform. Our platform provides a seamless experience for finding reliable answers from a network of experienced professionals.

Ted's Co. offers a zero coupon bond with an 11.3% yield to maturity. The bond matures in 16 years. What is the current price of a $1,000 face value bond

Sagot :

facundobuzzetti

Answer:

Zero-cupon bond= $835.45

Explanation:

Giving the following information:

Face value= $1,000

YTM= 11.3%

Years to maturity= 16 years

To calculate the price of the bond, we need to use the following formula:

Zero-cupon bond= [face value/(1+i)^n]

Zero-cupon bond= 1,000 / (1.113^16)

Zero-cupon bond= $835.45

We appreciate your visit. Hopefully, the answers you found were beneficial. Don't hesitate to come back for more information. Thanks for using our service. We're always here to provide accurate and up-to-date answers to all your queries. Thank you for visiting Westonci.ca, your go-to source for reliable answers. Come back soon for more expert insights.