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Suppose your company needs to raise $14 million and you want to issue 24-year bonds for this purpose. Assume the required return on your bond
Suppose your company needs to raise $14 million and you want to issue 24-year bonds for this purpose. Assume the required return on your bond issue will be 6 percent, and you're evaluating two issue alternatives: a 6 percent semiannual coupon bond and a zero coupon bond. Your company's tax rate is 32 percent. a. You will need to issue of the coupon bonds to raise the $14 million. You will need to issue of the zeroes to raise the $14 million. (Round your answers to the nearest whole number. (e.g., 32)) b. In 24 years, your company's repayment will be $| if you issue the coupon bonds. (Do not include the dollar sign ($).) If you issue the zeroes, your company's repayment will be $ (Do not include the dollar sign ($). Do not round your intermediate calculations. Round your answers to the nearest whole number. (e.g., 32)) C. Your aftertax cash outflow for the first year will be $ if you issue the coupon bonds, and a cash inflow of $ if you issue the zeroes. (Do not include the dollar signs ($). Do not round your intermediate calculations. Round your answers to the nearest whole number. (e.g., 32))
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