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How many zero coupon bonds will have to be issued

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Reference no: EM132494057

Lend Lease Corporation Ltd is planning to issue 10-year bonds. The going market rate for such bonds is 8.125 per cent. Assume that coupon payments will be semi-annual. The company is trying to decide between issuing an 8 per cent coupon bond or a zero coupon bond. The company needs to raise $1 million.

Question a. What will be the price of the 8 per cent coupon bonds?

Question b. How many coupon bonds would have to be issued?

Question c. What will be the price of the zero coupon bonds?

Question d. How many zero coupon bonds will have to be issued?

Reference no: EM132494057

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