J&J Enterprises wants to issue sixty 20-year, $1,000 zero-coupon bonds. If each bond is to yield 7%, how much will J&J receive (ignoring issuance costs) when the bonds are first sold?

Question

1.01K viewsJanuary 20, 2017

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Darshita 6.14K January 20, 2017 0 Comments

A) $11,212
B) $12,393
C) $15,505
D) $18,880
E) $20,000

1 Answer

score 0 · Answer 1 · 2017-01-20T01:46:01+00:00

Answer: C

Response: price = $1,000 / 1.0720 = $258.42; proceeds = $258.42 x 60 = $15,505

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1 Answer

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