Highland Corp

question 16

Multiple Choice

Highland Corp., a U.S. company, has a five-year bond whose yield to maturity is 6.5 percent. The bond has no coupon payments. What is the price of this zero coupon bond?

• A) $927.83
• B) $725.27
• C) $890.45
• D) $1,113.23

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Definitions:

Estimated Useful Life

The length of time, usually expressed in years or periods, that an asset is expected to be used in business operations.

Plant Assets

Durable physical assets utilized in manufacturing goods and providing services, including structures, machines, and tools.

Nonphysical Assets

Assets that do not have a physical presence, such as intellectual property, patents, and trademarks.

Land Account

An account on the balance sheet that reports the cost of land owned by a company.