# Question: What is the price of a zero coupon bond that has

What is the price of a zero-coupon bond that has a par value of $1,000? The bond matures in thirty years and offers a yield to maturity of 4.5 %. Calculate the price one year later when the bond has twenty-nine years left before it matures (assume the yield remains at 4.5%). What is the return that investors earn if they buy the bond with thirty years remaining and sell it one year later?

**View Solution:**## Answer to relevant Questions

A zero-coupon bond has a $1,000 face value, matures in 10 years, and currently sells for $781.20. a. What is the market's required return on this bond? b. Suppose you hold this bond for 1 year and sell it. At the time you ...The value of common stocks cannot be tied to the present value of future dividends because most firms don’t pay dividends. Comment on the validity, or lack thereof, of this statement. The C. Alice Stone Company’s common stock has paid a $3 dividend for so long that investors are now convinced that the stock will continue to pay that annual dividend forever. If the next dividend is due in one year and ...Investors expect the following series of dividends from a particular common stock: Year 1 ...... $1.10 Year 2 ......$1.25 Year 3 ......$1.45 Year 4 ......$1.60 Year 5 ......$1.75 After the fifth year, dividends will grow at ...Why do real returns matter more than nominal returns?Post your question