Bhupatbhai Apple recently issued a zero coupon bond. The zero coupon bond has a face value of $1 billion and matures in six years. Assume thatwhen the bonds were sold to the public, the annual market rate of interest was 3 percent.Required:2. How much did Apple receive when it issued the bonds with a face value of $1 Billion?3. How much would Apple have received if the annual market rate of interest remained at 3 percent, and the bonds matured in 10years?Complete this question by entering your answers in the tabs below.Required 2Required 3How much did Apple receive when it issued the bonds with a face value of $1 Billion?Note: Round your PV Factors to 5 decimal places. Enter your answer as a whole dollars rounded to nearest whole number.Present value$837,520,938 ×

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Answered: Apple recently issued a zero coupon…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter8: Analysis Of Risk And Return

Section: Chapter Questions

Problem 9P

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i need help with part B please. A government bond with 2 years until maturity has a face value of £120,000 and anannual nominal coupon rate of 1%. Assume that the relevant nominal market interestrate (annualized) is equal to 5%. The coupon payments are made every 6 months.(a) Calculate the present value of the bond. (b) Assume the individual coupons are stripped from the bond and soldseparately as zero coupon bonds. Calculate the market value of these zero couponbonds. Assume there are no further changes to the market rate. How would youexpect the price of the bond to evolve?

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