Asked Oct 14, 2019
Smooth Sailing Warehouse wants to issue 15-year, zero coupon bonds that yield 7.50% with semi-annual compounding. What price should it charge for these bonds if the face value is $1,000?
Group of answer choices

Expert Answer

Step 1

Calculate the bond pri...

Face value
Bond price
Number of periodas
15 2
= S331.403307490636 or S331.40|

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Face value Bond price Number of periodas Yield 1+ $1,000 15 2 0.075 1+ $1,000 (1.0375)0 = S331.403307490636 or S331.40|


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