When a company issues bonds that include no periodic interest payments,the bonds are called zero-coupon bonds.

Question

Quizplus · Accepted Answer

Zero-coupon bonds are issued at a discount to their face value and do not make periodic interest payments, hence the term "zero-coupon". Instead, they are typically redeemed at their face value at maturity, providing investors with a return that is equal to the difference between the purchase price and the face value.

When a Company Issues Bonds That Include No Periodic Interest