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Please show all steps to solve this problem. Do not use excel. Explain so I learn. Suppose your company needs to raise #20 million
Please show all steps to solve this problem. Do not use excel. Explain so I learn. Suppose your company needs to raise #20 million and you want to issue 20-year bonds for this purpose. You are evaluating the following two bond issue alternatives: 1. An 8% annual coupon bond 2. A zero-coupon bond Assume market interest rate (required rate of return) is 10% and bonds are sold at their market price- a. you How many of the coupon bonds would need to issue to raise the $20 million ? b. How many of the zero-coupon bonds would You need to issue to raise the $20 million? w/coupon C. In 20 years, what will your company's repayment be bond w/zero d. In 20 years, what will your company's repayment be compon?
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