Lopez Information Systems is planning to issue 10-year bonds. The going market yield for such bonds is 8.45 percent. Assume that coupon payments will be made semiannually. The firm is trying to decide between issuing an 8 percent coupon bond or a zero coupon bond. The company needs to raise $1 million. What will be the price of an 8 percent coupon bond? (Round intermediate calculations to 4 decimal places, e.g. 1.2514 and bonds value to 2 decimal places, e.g 15.25.) Bond value $ How many 8 percent coupon bonds would have to be issued? (Round number of bonds to the nearest whole number, e.g 5,275.) Number of bonds issued What will be the price of a zero coupon bond? (Round intermediate calculations to 4 decimal places, e.g. 1.2514 and bonds value to 2 decimal places, e.g 15.25.) Price of a zero coupon bond $
Lopez Information Systems is planning to issue 10-year bonds. The going market yield for such bonds is 8.45 percent. Assume that coupon payments will be made semiannually. The firm is trying to decide between issuing an 8 percent coupon bond or a zero coupon bond. The company needs to raise $1 million. What will be the price of an 8 percent coupon bond? (Round intermediate calculations to 4 decimal places, e.g. 1.2514 and bonds value to 2 decimal places, e.g 15.25.) Bond value $ How many 8 percent coupon bonds would have to be issued? (Round number of bonds to the nearest whole number, e.g 5,275.) Number of bonds issued What will be the price of a zero coupon bond? (Round intermediate calculations to 4 decimal places, e.g. 1.2514 and bonds value to 2 decimal places, e.g 15.25.) Price of a zero coupon bond $
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Lopez Information Systems is planning to issue 10-year bonds. The going market yield for such bonds is 8.45 percent. Assume that coupon payments will be made semiannually. The firm is trying to decide between issuing an 8 percent coupon bond or a zero coupon bond. The company needs to raise $1 million.
- What will be the price of an 8 percent coupon bond? (Round intermediate calculations to 4 decimal places, e.g. 1.2514 and bonds value to 2 decimal places, e.g 15.25.)
|
Bond value |
$ |
How many 8 percent coupon bonds would have to be issued? (Round number of bonds to the nearest whole number, e.g 5,275.)
|
Number of bonds issued |
What will be the price of a zero coupon bond? (Round intermediate calculations to 4 decimal places, e.g. 1.2514 and bonds value to 2 decimal places, e.g 15.25.)
|
Price of a zero coupon bond |
$ |
How many zero coupon bonds will have to be issued? (Round number of bonds to the nearest whole number, e.g 5,275.)
|
Number of bonds issued |
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