Below are yields of risk-free zero-coupon $1,000-par-value bonds of various maturities: 4 5 Maturity (years) 1...

 

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Below are yields of risk-free zero-coupon $1,000-par-value bonds of various maturities: 4 5 Maturity (years) 1 YTM 2 3.25% 3.50% 4.25% 4.40% a) Fill in the blank in the table above if market price of the three-year zero-coupon bond is $891.57 b) Plot the yield curve based on the values in the table 3 c) Suppose you would like to finance a project with equity. The project is expected to deliver cash flows during the next 5 years. Which of the risk-free rates from the table above you would use to estimate the projects' cost of capital? Explain your choice. Below are yields of risk-free zero-coupon $1,000-par-value bonds of various maturities: 4 5 Maturity (years) 1 YTM 2 3.25% 3.50% 4.25% 4.40% a) Fill in the blank in the table above if market price of the three-year zero-coupon bond is $891.57 b) Plot the yield curve based on the values in the table 3 c) Suppose you would like to finance a project with equity. The project is expected to deliver cash flows during the next 5 years. Which of the risk-free rates from the table above you would use to estimate the projects' cost of capital? Explain your choice.