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As we know, zero-coupon bonds are issued without any periodic coupon payments. The investor gets the interest and the principal on a maturity date. The interest is the difference between the purchase price and the maturity value. The price of this bond is computed as follows:
V0 = M/(1 + r)n .... Eq. (4)
Where,
V0 = Value of the bond
M = Maturity value
r = Expected rate of return
n = Period of the bond.
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Prepare your recommendation on Agarwal Cast Company
What remains of an organization revenue after all expenses and taxes have been paid.
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