Question
As finance executive of Marriott International, your companys CEO wants you to manage the issuance of a 2-year zero-coupon bond with par value of $40
As finance executive of Marriott International, your companys CEO wants you to manage the issuance of a 2-year zero-coupon bond with par value of $40 million. He also wants you to educate him on what the issuance would entail. Which of these would you tell her?
A. We will have to focus on only the maturity risk premium for the Treasury bonds we have bought B. We will have to decide what the discount on the par value would be in order to sell the bond so the buyers are compensated with some capital appreciation upon maturity C. The maturity of the zero-coupon bonds does not matter D. We will have to decide on the discount rate for the zero-coupon bonds maturity
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