Global Exporters wants to raise some money to expand its business. To accomplish this, it plans...
Global Exporters wants to raise some money to expand its business. To accomplish this, it plans to sell 20- year, $1,000 face value, zero coupon bonds. The bonds will be priced to yield 7.75 percent. What is the price of the zero coupon bonds, assuming annual compounding. (Show your work).
Homework Answers
Price of bond = Face value / (1 + r)n
Price of bond = 1000 / (1 + 0.0775)20
Price of bond = 1000 / 4.44985
Price of bond = $224.73
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