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Below are yields of risk-free zero-coupon $1.000-par-value bonds of various maturities. 1 Maturity (years) 2 3 4 5 YTM 3.25% 3.50% 3.996 4.25% a. Fill

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Below are yields of risk-free zero-coupon $1.000-par-value bonds of various maturities. 1 Maturity (years) 2 3 4 5 YTM 3.25% 3.50% 3.996 4.25% a. Fill in the blank if market price of the five-year zero-coupon bond is 809.79. b. Construct yield curve using values from the table. c. Suppose you would like to finance a project with equity. The project is expected to deliver cash flows during the next 3 years. Which of the risk-free rates from the table above you would use to estimate projects' cost of capital? Explain your choice

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