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    Implicit interest for a zero coupon bond

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    Suppose a firm needs to raise $10 million by issuing 10-year zero coupon bonds. The firm's cost of debt is 8%. Compute the total implicit interests for the first year (or year 1) and the last year (or year 10).

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    Suppose a firm needs to raise $10 million by issuing 10-year zero coupon bonds. The firm's cost of debt is 8%. Compute the total implicit interests ...

    Solution Summary

    The expert calculates the implicit interest for zero coupon bonds.

    $2.19

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