Suppose your company needs to raise $45 million and you want to issue 30-year bonds for this purpose. Assume the required return on your bond issue will be 6 percent, and youre evaluating two issue alternatives: A 6 percent semiannual coupon bond and a zero coupon bond. Your companys tax rate is 35 percent.

--Calculate the aftertax cash flows for the first year for each bond

Coupon Bond:

Zero Coupon Bond: