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Chapter 8 Financing East Coast Yachts Expansion Plans with a Bond Issue Input area: Years to maturity 20 Required return 7.50% Payments until maturity: Amount

Chapter 8
Financing East Coast Yachts Expansion Plans with a Bond Issue
Input area:
Years to maturity 20
Required return 7.50% Payments until maturity:
Amount needed $ 50,000,000 Present Value:
Face value $ 1,000 Present Value of maturity amount:
Coupon rate 7.50%
Tax rate 35%
Year bond is called 7
Spread above Treasury 0.40%
Treasury rate at call 4.80%
Treasury rate at call 8.20%

Calculate the price of the coupon bond

Repayment of coupon bond and repayment of zeros

image text in transcribed
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