Current market interest rates are 6%. A bond with an 8% coupon would be most likely to have a net present value of zero when the bond is

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19-01-2022
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Current market interest rates are 6%. A bond with an 8% coupon would be most likely to have a net present value of zero when the bond is

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ewomazinoade ewomazinoade · Answer 1 · 2022-01-31T12:57:42+01:00

A bond with an 8% coupon would be most likely to have a net present value of zero when the bond is mature.

What is net present value?

Net present value is the present value of after-tax cash flows from an investment less the amount invested.

What does it mean when a bond is selling at a discount, premium or at par?

If the market interest rate is greater than the bond's coupon rate the bond is selling at a discount. If the market interest rate is less than the bond's coupon rate the bond is selling at a premium. If a bond’s coupon rate is equal to its market interest rate , then the bond is selling at par.

To learn more about net present value, please check: https://brainly.com/question/25748668