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Suppose your company needs to raise $40.7 million and you want to issue 20 year bonds for this purchase. Assume the required return on your
Suppose your company needs to raise $40.7 million and you want to issue 20 year bonds for this purchase. Assume the required return on your bond issue will be 5.7 percent semiannual coupon bond and a zero coupon bond. Your company's tax rate is 22 percent. Assume that the IRS amortization rules apply for the zero coupon bonds. Calculate the firm's aftertax cash outflows for the first year under the two different scenarios?
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