Homework Helper

Not Rated (0)

$17/per page/

About Homework Helper

Levels Tought:
Elementary,Middle School,High School,College,University,PHD

Expertise:
Accounting,Applied Sciences See all
Accounting,Applied Sciences,Art & Design,Chemistry,Economics,Essay writing Hide all
Teaching Since: Apr 2017
Last Sign in: 419 Weeks Ago, 1 Day Ago
Questions Answered: 3232
Tutorials Posted: 3232

Education

  • MBA,MCS,M.phil
    Devry University
    Jan-2008 - Jan-2011

  • MBA,MCS,M.Phil
    Devry University
    Feb-2000 - Jan-2004

Experience

  • Regional Manager
    Abercrombie & Fitch.
    Mar-2005 - Nov-2010

  • Regional Manager
    Abercrombie & Fitch.
    Jan-2005 - Jan-2008

Category > Business & Finance Posted 31 May 2017 My Price 11.00

Analyzing Z e r o Coupon Bonds f r om an A ctual Compa n y

Analyzing Z e r o Coupon Bonds f r om an A ctual Compa n y

 

JCPenney Company was one of the first companies to issue zero coupon bonds. It issued bonds with a face (maturity) value of $400 million due eight years after issuance. When the bonds were sold to the public, similar bonds paid 15 percent effective interest. An article in Forbes magazine discussed the JCPenney bonds and stated: “It’s easy to see why corporations like to sell bonds that don’t pay inter- est. But why would anybody want to buy that kind of paper [bond]?”

 

Required:

1. Explain why an investor would buy a JCPenney bond with a zero interest rate.

2. If investors could earn 15 percent on similar investments, how much did JCPenney receive when it issued the bonds with a face value of $400 million?

Answers

Homework Helper
Not Rated (0)
Status NEW Posted 31 May 2017 06:05 AM My Price 11.00

Hel-----------lo -----------Sir-----------/Ma-----------dam----------- T-----------han-----------k Y-----------ou -----------for----------- us-----------ing----------- ou-----------r w-----------ebs-----------ite----------- an-----------d a-----------cqu-----------isi-----------tio-----------n o-----------f m-----------y p-----------ost-----------ed -----------sol-----------uti-----------on.----------- Pl-----------eas-----------e p-----------ing----------- me----------- on----------- ch-----------at -----------I a-----------m o-----------nli-----------ne -----------or -----------inb-----------ox -----------me -----------a m-----------ess-----------age----------- I -----------wil-----------l

Not Rated(0)