Rockinghouse Corp. management plans to issue seven-year zero coupon bonds. It has learned that these bonds...

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Rockinghouse Corp. management plans to issue seven-year zero coupon bonds. It has learned that these bonds will sell today at Marshall Company is issuing four-year bonds with a coupon rate of 4.5 percent and semiannual coupon payments. If the current

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Answer 1

Answer #1

a)

=RATE(nper,pmt,pv,fv)

=RATE(7,0,-439.76,1000)

=12.45%

b)

=PV(rate,nper,pmt,fv)

=PV(9.3%/2,4*2,4.5%/2*1000,1000)

=842.66

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Answer 2

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