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Arts and Crafts Warehouse wants to issue 15-year, zero coupon bonds that yield 7.5 percent. What...

Arts and Crafts Warehouse wants to issue 15-year, zero coupon bonds that yield 7.5 percent. What price should it charge for these bonds if the face value is $1,000? (Assume semi-annual compounding.)

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Answer #1
Face value (FV) $                                         1,000
Coupon rate 0.00%
Number of compounding periods per year 2
Interest per period (PMT) $                                                -  
Number of years to maturity 15
Number of compounding periods till maturity (NPER) 30
Market rate of return/Required rate of return 7.50%
Market rate of return/Required rate of return per period (RATE) 3.75%
Bond price PV(RATE,NPER,PMT,FV)*-1
Bond price $                                       331.40
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