--%>

Zero Coupon Bonds-Corporate Bonds

Describe the term Zero Coupon Bonds in Corporate Bonds?

E

Expert

Verified

Zero Coupon Bonds:

• Corporations sometimes issue bonds which have no coupon payments over its life and merely offer a solo payment at maturity.

• Zero coupon bonds sell well beneath their face value (at a deep discount) since they offer no coupons.

• The most common and regular issuer of zero coupon securities is the U.S. Treasury Dept.

   Related Questions in Corporate Finance

  • Q : APR of Loan When you take out an $8,000

    When you take out an $8,000 car loan that calls for 48 monthly payments of $225 each, then what is the APR of loan?

  • Q : Why classical option pricing required

    Why classical option pricing with constant volatility required?

  • Q : Discounting Free Cash Flow or

    Which of these two ways is better: discounting the Free Cash Flow or discounting the Equity Cash Flow?

  • Q : Compute betas against local indexes

    Does it make any sense to compute betas against local indexes while a company has a great part of its operations outside such local market? I have two illustrations: BBVA and Santander.

  • Q : Who proposed modern quantitative

    Who proposed a modern quantitative methodology for portfolio selection?

  • Q : Price per share for Corporation For XYZ

    For XYZ Corporation debt-to-equity ratio, marginal tax rate, and dividend payout ratio are all of 40%. The cost of debt is 10%. Cambria contains 1 million shares of common stock, and $25 million in long-term bonds. Its dividend is $1 per share. Determine the EBIT and

  • Q : Financing EBIT problem Rusk Inc needs

    Rusk Inc needs $50 million in new capital that it might obtain by selling bonds at par with coupon of 12% or by selling stock at $40 (net) per share. The current capital structure of Rusk consists of $300 million (face value) of 10% coupon bonds selling at 90 and 10 m

  • Q : Explain Cost of capital aspect Cost of

    Cost of capital aspect: Estimation of WCR is beneficial from the point of view of cost of capital too. A sound working capital position is beneficial from the point of view of both owners and lenders of the company. A sufficiently positive position me

  • Q : Could we explain that the shares’ value

    Could we explain that the shares’ value is intangible?

  • Q : Who published a book regarding

    Who published a book regarding option formula and risk neutrality?