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spin [16.1K]
1 year ago
3

duke inc. issues a zero-coupon bond that will expire in 23 years, with a face value of $1000 and a yield to maturity of 13.2 per

cent. what should be its price right now? (retain two decimal places, such as 39.98. do not include the dollar sign.)
Business
1 answer:
vichka [17]1 year ago
3 0

The price of the bond right now is $57.74

The entire return anticipated on a bond if it is kept to maturity is known as yield to maturity (YTM). Although it is expressed as an annual rate, yield to maturity is regarded as a long-term bond yield. It is, therefore, the internal rate of return (IRR) of a bond investment if the investor holds the bond until maturity, with all scheduled payments made and reinvested at the same rate.

Years to maturity = 23

Yield to maturity = 13.2%

Face value = $1000

Price of the bond right now:

M/(1+r)^n

where M is the value at maturity or face value

r = rate of interest

n = number of years till maturity

Substituting the values we get:

= 1000/(1+0.132)^23

= 1000/17.3168

$57.74

Learn more about bonds:

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4 0
3 years ago
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Answer:

=  $120,500.00

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Kindly note that the $59,000 depreciation is a fixed cost which do not vary with the hours of production.

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rodikova [14]

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This is further explained below.

<h3>Which of these factors limits the usefulness of the world wide web as a source of information for research consumers</h3>

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CQ

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