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07 Zero Coupon Yield Curve 3.5 Yield to Maturity (%) 3 2.5 2 1 2+ 2 3 5 Maturity (years) The current zero-coupon yield curve

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07 Zero Coupon Yield Curve 3.5 Yield to Maturity (%) 3 2.5 2 1 2+ 2 3 5 Maturity (years) The current zero-coupon yield curve based on yield information for 5 risk-free bonds is shown above. Each of these 5 different risk-free zero coupon bonds has a different term. What is the price of a new zero-coupon, four-year, risk-free bond that has a $100 future value? O $92.15 O $96.67 $85.64 $87.99 Which discount rate should be used to discount free cash flows? waccc O risk free rate O cost of debt O cost of equity

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