Homework Answers
The Face Value amount of the bond is ‘F’, then
8,500,000 = F/(1+9%)^20 (since it is a zero coupon bond)
F = 8,500,000 * (1+9%)^20 = $47,637,491.53
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(Round answer to 2 decimal places, e.g.
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How many bonds would the firm have to issue to raise $1 million?
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