ZuoTi.Pro
Question

3 Q067 Zero Coupon Bonds non bonds are sold at a substantial discount from the face value, and the buyer receives the face va
5 Q080 Break Even Analysis Page 159 Total Cost = variable cost + fixed cost Break even, when revenue = cost. Profit = revenue
6 Q097 Sinking Fund Veronica wants to set up a sinking fund in order to have $16,300. in 14 years she can obtain an annual in

like this?
U mber 3 y T V Credit for the exam which has your name printed on it. Make O at EU FI FIN 2010 he correct exam. If necessary
business   accounting   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

3. Zero coupon bond

Purchase price of the bond = $8,906.96

Term of Bond = 15 years

Interest rate = 7% p.a. compounded semi-annually i.e. 3.5% for 6 months

Annuity factor of 3.5% for 30 periods = 2.80679

Face value of bond = Purchase price of bond * Annuity factor of 3.5% for 30 periods

= $8,906.96 * 2.80679

= $25,000

0 0
Add a comment
Know the answer?
Add Answer to:
like this? 3 Q067 Zero Coupon Bonds non bonds are sold at a substantial discount from...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • 3 Q067 Zero Coupon Bonds Zero-coupon bonds are sold at a substantial discount from the face...

    3 Q067 Zero Coupon Bonds Zero-coupon bonds are sold at a substantial discount from the face value, and the buyer receives the face value of the bond when it matures. The difference between the face value and the price of the bond is the interest earned To determine the purchase amount of a zero-coupon bond. Calculate the present value of the Future value) maturity value. Veronica bought a 15-year zero-coupon bond paying 7% (annual rate) interest (compounded semiannually) for $8.906.96....

  • 1)   Cyberdyne Systems is issuing a series of zero coupon bonds to raise​ $500M to fund...

    1)   Cyberdyne Systems is issuing a series of zero coupon bonds to raise​ $500M to fund research and development at its Skynet division. Each bond will have a face value of ​$1,000 and will mature in 17 years. The yield on the bond is 4.5​%. What is the fair price for one of​ Cyberdyne's zero coupon​ bonds? The fair price for one of​ Cyberdyne's zero coupon bonds is ​$ 2) Suppose you purchase a zero coupon bond with a face...

  • 4. (Zero Coupon Bonds) A zero coupon bond is a debt security that does not pay...

    4. (Zero Coupon Bonds) A zero coupon bond is a debt security that does not pay interest but trades at a discount, and will pay its face value at maturity. Suppose a zero coupon bond matures to a value of $1000 in eight years. If the bond is yielding at 4% per annum, what is the purchase price of the bond? Suppose a 8-year coupon-paying bond is paying $40 a year, and has a face value of $1000 is selling...

  • 5 Q080 Break Even Analysis Page 159 Total Cost variable cost + fixed cost Break even...

    5 Q080 Break Even Analysis Page 159 Total Cost variable cost + fixed cost Break even when revenue = cost. Profit = revenue - cost A company manufactures a dish washer that sells to retailers for $550. R(x)=550 ** The cost of making x of these dish washer is given by the cost function C(x)=240x+1560 a. Write the revenue function and determine the revenue if 43 are sold. 3 points b. Determine the profit function. What is the profit if...

  • Slice & Dice Investment Co. - zero coupon bonds that have no risk of default

    The Slice & Dice Investment Co. needs some help understanding the intricacies of bond pricing. It has observed the following prices for zero coupon bonds that have no risk of default:MaturityPrice per $1 Face Value1 year$0.972 years0.903 years0.81How much should Slice & Dice be willing to pay for a three-year bond that pays a 6-percent coupon, assuming annual coupon payments start one year from now?What is the yield to maturity of the three-year coupon bond?Suppose Slice & Dice purchases this...

  • Please provide the relevant formulas and calculate the results. There are three different bonds Bond A...

    Please provide the relevant formulas and calculate the results. There are three different bonds Bond A has a 5% annual coupon, matures in 12 years, and has a $5,000 face value. Bond B has a 9% annual coupon, matures in 12 years, and has a $2,000 face value. Bond C has an 15% annual coupon, matures in 12 years, and has a $1,000 face value The interest rate is 9% Calculate the price of each of the three bonds at...

  • .A Corporation sold 5000 issue of 20-year bonds, having a total face value of 10,000,000 for...

    .A Corporation sold 5000 issue of 20-year bonds, having a total face value of 10,000,000 for 9,500,000. The bonds bear interest at 16%, payable semiannually. The company wishes to establish a sinking fund for retiring the bond issue and will make semiannual deposit that will earn 12%, compounded semiannually. Compute the annual cost for interest and redemption of these bonds. If an investor wishes to dispose of his 100 shares of his bonds at the end of the tenth year,...

  • 1. The following table summarizes prices of various default-free, zero-coupon bonds (expressed as a percentage of...

    1. The following table summarizes prices of various default-free, zero-coupon bonds (expressed as a percentage of face value): Maturity (years) Price (per $100 face value) $95.51 9105 $86.38 $81.65 $76.51 (a) Compute the yield to maturity for each bond. (b) Plot the zero-coupon yield curve (for the first five years). (c) Is the yield curve upward sloping, downward sloping, or flat? 2. Suppose a seven-year, $1000 bond with an 8% coupon rate and semiannual coupons is trading with a yield...

  • A zero coupon bond has a face value of $1,000 and matures in 6 years. Investors...

    A zero coupon bond has a face value of $1,000 and matures in 6 years. Investors require​ a(n) 7.2 % annual return on these bonds. What should be the selling price of the​ bond? If the nominal rate of interest is 12.21 % and the real rate of interest is 8.76 % what is the expected rate of​ inflation? A Ford Motor Co. coupon bond has a coupon rate of 6.75​%, and pays annual coupons. The next coupon is due...

  • Cyberdyne Systems is issuing a series of zero coupon bonds to raise​ $500M to fund research...

    Cyberdyne Systems is issuing a series of zero coupon bonds to raise​ $500M to fund research and development at its Skynet division. Each bond will have a face value of ​$1,000 and will mature in 15 years. The yield on the bond is 8.5​%. What is the fair price for one of​ Cyberdyne's zero coupon​ bonds? The fair price for one of​ Cyberdyne's zero coupon bonds is ​$___   ​(Round to the nearest​ cent.)

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT