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5. (4 marks) HSD Corporation needs to raise funds to finance a plant expansion and it has decided to issue 25 -year zero coupon bonds
5. (4 marks) HSD Corporation needs to raise funds to finance a plant expansion and it has decided to issue 25 -year zero coupon bonds to raise the money. The required return on the bonds will be 8%. Assume FV is $1000. a. What will these bonds sell for at issuance? (1.5 marks) b. How many of these bonds would the company need to issue to raise 15M ? (1 marks) c. If the bond includes a 10% coupon, what will the bonds sell for at issuance? ( 1.5 marks)
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