#17 Cyberdyne Systems is issuing a series of zero coupon bonds to raise $500M to

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#17 Cyberdyne Systems is issuing a series of zero coupon bonds to raise $500M to fund research and development at its Skynet division. Each bond will have a face value at $1000 and will mature in 11 years. The yield on the bond is 5.5%. What is the fair price for one of Cyberdynes zero coupon bonds ? #17 Cyberdyne Systems is issuing a series of zero coupon bonds to raise $500M to fund research and development at its Skynet division. Each bond will have a face value at $1000 and will mature in 11 years. The yield on the bond is 5.5%. What is the fair price for one of Cyberdynes zero coupon bonds ?

Explanation / Answer

Fair Price=PV(0.055,11,0,-1000)=554.91 OR 1000/(1.055^11)=554.91

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#17 Cyberdyne Systems is issuing a series of zero coupon bonds to raise $500M to

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