Valuing zero-coupon bond, Financial Management

Assignment Help:

As we know, zero-coupon bonds are issued without any periodic coupon payments. The investor gets the interest and the principal on a maturity date. The interest is the difference between the purchase price and the maturity value. The price of this bond is computed as follows:

         V0  = M/(1 + r)n                                                                      .... Eq. (4) 

Where,

         V0      =       Value of the bond

         M       =       Maturity value

         r         =       Expected rate of return

         n         =       Period of the bond.


Related Discussions:- Valuing zero-coupon bond

Implementing systems effectively, Implementing Systems Effectively: Muc...

Implementing Systems Effectively: Much of the accounting process has been taken over by office automation systems. Whereas once the vast majority of bookkeeping and reporting t

OPERATING CYCLE, discuss the applicability of operation cycle in avegetab...

discuss the applicability of operation cycle in avegetable growing business

Advantages to the investors, Advantages to the Investors: The warran...

Advantages to the Investors: The warrant acts as a sweetener and ensures a better subscription to the NCDs, especially for companies with good track record. NCDs with warran

Certified management accountant, Q. Certified Management Accountant? Ce...

Q. Certified Management Accountant? Certified Management Accountant (CMA) - An accreditation conversed by the Institute of Management Accountants which indicates the designee h

Determine the term- component cost and composite cost, Determine the term- ...

Determine the term- Component Cost and Composite Cost A company may contemplate to raise desired amount of funds by different sources comprising preferred stock, debentures and

Call and notice money, These funds represent borrowings made for a pe...

These funds represent borrowings made for a period of one day to upto a fortnight. However, the mechanism adopted to lend funds to the call and the notice money m

Healthcare finance, You are considering starting a walk-in-clinic. Your fin...

You are considering starting a walk-in-clinic. Your financial projections for the first year of operation are as follows: Revenues (10,000 visits) $400,000 Wages and benefits $220,

Case study, credit limit decision bajaj electronics company

credit limit decision bajaj electronics company

Explain in detail about the cost of capital, Explain in detail about the Co...

Explain in detail about the Cost of Capital Every type of capital used by the firm (preference shares, debt and equity) must be incorporated into the cost of capital, with rela

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd