A company plans to issue 8-year zero coupon bonds with a face value of $1000....
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Accounting
A company plans to issue 8-year zero coupon bonds with a face value of $1000. The price is set at the amount that would give potential investors a rate of return of 7% p.a.
a)Calculate the bond price on the issue date if we assume annual coupons would be paid by comparable risk coupon bonds. _____
b) Recalculate the bond price on the issue date if we assume that semi-annual coupons would be paid by comparable risk coupon bonds. _______
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