After Dans EFN analysis for East Coast Yachts (see your Homework Assignment 1), Larissa has decided to expand the companys operations. She has asked Dan to enlist an underwriter to help sell $50 million in new20-year bonds to finance new construction. Dan has entered into discussions with Kim McKenzie, an underwriter from the firm of Crowe & Mallard, about which bond features East Coast Yachts should consider and also what coupon rate the issue will likely have. Although Dan is aware of bond features, he is uncertain as to the costs and benefits of some of them, so he isnt clear on how each feature would affect the coupon rate of the bond issue.

Find Question 2 and 3 using excel.

	Years to maturity	20
	Required return	6.50%
	Amount needed	$50,000,000
	Face value	$1,000
	Coupon rate	6.50%

2)	Price of coupon bond
	# of coupon bonds needed	50,000
	Price of zero coupon bond
	# of zeroes needed
3)	Repayment of coupon bonds	$50,000,000
	Repayment of zeroes