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5. Suppose the current yields for risk-free zero-coupon bonds are as follows: 4 5.85% 5 6.05% years 4.5% a) Fill in the balnk space in
5. Suppose the current yields for risk-free zero-coupon bonds are as follows: 4 5.85% 5 6.05% years 4.5% a) Fill in the balnk space in the table given that three year zero coupon bond is traded at $851.61 per $1,000 of par value. b) Construct the yield curve for risk-free interest rates for maturities 1 through 5 years. Be sure to label axes c) Suppose you would like to finance a project with equity. The project is expected to deliver cash flows during the next 4 years. You expect cash flows to market but at one-half of the rate of increase/decrease of market return. Expected market return is 10%. Estimate your project's cost ofcapital. together with the
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