After John's external financing need analysis for East Coast Yachts, Max has decided to expand the company's operations. She has asked John to enlist an underwriter to help sell $52 million in new 25-year bonds to finance new construction. John has entered into discussions with Zoe Cluskey, an underwriter from the firm of BGA, about which bond features East Coast Yachts should consider and also what coupon rate the issue will likely have. Although John is aware of bond features, he is uncertain as to the costs and benefits of some of them, so he isn't clear on how each feature would affect the coupon rate of the bond issue. You are Zoe's assistant, and she has asked you to prepare a report to John's addressing the following:

1. Are investors really made whole with a make-whole call provision? Why or why not? If they are not, then how can this feature be modified so that investors are indeed made whole? Explain.

2. After considering all the relevant factors, would you recommend a zero-coupon issue or a regular coupon issue? Would you recommend an ordinary call feature or a make-whole call feature? Explain your justifications.