$10$

Suppose your company needs to ralse $$40$ million and you want to Issue $30-$year bonds

for this purpose. Assume the required return on your bond issue will be $8$ percent and

you're evaluating two issue alternatlves: a semiannual coupon bond with a coupon rate

of $8$ percent and a zero coupon bond. Your company's tax rate is $21$ percent. Assume a

par value of $$1,000.$

a$-1.$ How many of the coupon bonds would you need to Issue to ralse the $$40$ million?

$($Do not round Intermedlate calculations and round your answer to the nearest

whole number, e$.$g$.,32.)$

a$-2.$ How many of the zeroes would you need to issue? $($Do not round Intermedlate

calculations and round your answer to the nearest whole number, e$.$g$.,32.)$

b$-1.$ In $30$ years, what will your company's repayment be If you issue the coupon bonds?

$($Do not round Intermedlate calculations and enter your answer In dollars, not

millions of dollars, rounded to the nearest whole number, e$.$g$.,1,234,567.)$

b$-2.$ What If you issue the zeroes? $($Do not round Intermedlate calculations and enter

your answer In dollars, not millions of dollars, rounded to the nearest whole

number, e$.$g$.,1,234,567.)$

c$.$ Calculate the firm's aftertax cash outflows for the first year for each bond. $($Enter

your answers as positive values. Do not round Intermedlate calculations and

enter your answers In dollars, not millions of dollars, rounded to the nearest

whole number, e$.$g$.,1,234,567.)$