PepsiCo Overseas issues dollar denominated zero-coupon Eurobonds at a price of 67. 25 percent. The bonds are

Question:

PepsiCo Overseas issues dollar denominated zero-coupon Eurobonds at a price of 67. 25 percent. The bonds are to be repaid at 100 percent three years hence.

a. What is the bonds’ yield to maturity?

b. Would your answer be different if you assume semiannual rather than annual compounding?

c. Where would the bonds be sold? Who are the likely investors?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer: