Finco plc is seeking to raise medium term funding of 10.5 million for a period of 20 years. The companys CFO has proposed that the finance should be raised through the issue of 20-year bonds with a face value of 100 each, paying an annual coupon at the rate of 4%. The company has decided to issue the bonds at a price that would offer investors a yield to maturity of 5.6% per annum, which is currently the annual market yield on bonds of similar risk and maturity., Finco plcs founder-director has questioned the need for issuing bonds, when a term loan could instead be raised from the companys bankers, who have been meeting the financing requirements of the enterprise ever since it was founded. He has suggested that, as an alternative to issue of bonds, a bank term loan of 10.5 million could be raised at an interest rate of 5% over the current base rate of 0.88% per annum. This would be an amortized loan, repayable over 20 years, in equated monthly instalments. Required: (a) Calculate the approximate issue price of the bonds (in nearest round pounds) and the number of bonds that would need to be issued at that price. What are the cash outflows that Finco plc would need to provide for in each of the 20 years in respect of the bond issue? (b) Estimate the annual cash outflow that Finco plc would have to provide for amortization of the bank term loan that has been proposed as an alternative to the issue of bonds. (c) Discuss the advantages and disadvantages of raising finance through the issue of bonds rather than through term loans.