A zero-coupon bond has no interest payments what would they


A zero-coupon bond has no interest payments. Investors buy the bonds for less than face value, and they receive the face value of the bond at the end of the bond’s life. A 30-year, zero-coupon bond that has a face value of $1,000 therefore is a promise to pay the investor $1,000 at the end of 30 years. If investors have a discount rate of 6%, what would they be willing to pay for this bond? What would they be willing to pay if their discount rate was 5% or 7%?

Request for Solution File

Ask an Expert for Answer!!
Financial Management: A zero-coupon bond has no interest payments what would they
Reference No:- TGS02792626

Expected delivery within 24 Hours