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Qantas is planning to issue 15-year bonds. The going market rate for such bonds is 8.2%. Assume that coupon payments will be semiannual. The company
Qantas is planning to issue 15-year bonds. The going market rate for such bonds is 8.2%. Assume that coupon payments will be semiannual. The company is trying to decide between issuing an 7.5% coupon bond or a zero coupon bond. The company needs to raise $1 million. a. What will be the price of the 7.5% coupon bonds? b. How many coupon bonds would have to be issued? c. What will be the price of the zero coupon bonds? d. How many zero coupon bonds will have to be issued?
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