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Suppose your company needs to raise $40.5 million and you want to issue 25-year bonds for this purpose. Assume the required return on your bond
Suppose your company needs to raise $40.5 million and you want to issue 25-year bonds for this purpose. Assume the required return on your bond issue will be 5.5 percent, and youre evaluating two issue alternatives: a semiannual coupon bond with a coupon rate of 5.5 percent and a zero coupon bond. The tax rate is 25 percent. Both bonds will have a par value of $1,000. How many of the coupon bonds would you need to issue to raise the $40.5 million? How many of the zeroes would you need to issue? Note: Do not round intermediate calculations. Round your coupon bond answer to the nearest whole number, e.g., 32 and your zero coupon bond answer to
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