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A corporation issues 25-year $1,000 zero-coupon bonds. If you buy one of these bonds you will receive no interest checks during the 25 years, but
A corporation issues 25-year $1,000 zero-coupon bonds. If you buy one of these bonds you will receive no interest checks during the 25 years, but will receive the $1,000 maturity value in 25 years.
Based on a prevailing 6% annual rate, what price must you pay for one of these bonds?
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The formula to calculate the price of a zerocoupon bond is Price Maturity Value 1 Interest ...
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Foundations of Financial Management
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta
10th Canadian edition
1259261018, 1259261015, 978-1259024979
