Question: solve WITHOUT A FINANCIAL CALCULATOR OR EXCEL PLEASE 2. Valuing a Zero-Coupon Bond. Assume the following information for existing zero-coupon bonds: Par value = $100,000

solve WITHOUT A FINANCIAL CALCULATOR OR EXCEL PLEASE

2. Valuing a Zero-Coupon Bond. Assume the following information for existing zero-coupon bonds: Par value = $100,000 Maturity = 3 years Required rate of return by investors = 12% How much should investors be willing to pay for these bonds? ANSWER: PV of Bond = PV of Coupon Payments + PV of Principal $0 + 100,000(PVIF-12% -3) -$100,000.7118) -$71,180

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