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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
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 you're evaluating two issue alternatives: A 6 percent semiannual coupon bond and a zero coupon bond. Your company's tax rate is 35 percent. a-1. How many of the coupon bonds would you need to issue to raise the $45 million? Number of coupon bonds 32.16)) Number of zero coupon bonds 45000 a-2. How many of the zeroes would you need to issue? (Round your answer to 2 decimal places. (e.g. 265122 b-1. In 30 years, what will your company's repayment be if you issue the coupon bonds? (Enter your answer in dollars, not millions of dollars, i.e. 1,234,567.) Coupon bonds repayment 1,234,567.) Zeroes repayment Calculate the aftertax cash flows for the first year for each bond. (Enter your answer in dollars, not $46350000 b-2. What if you issue the zeroes? (Enter your answer in dollars, not millions of dollars, i.e $ 265122000 c. millions of dollars, i.e. 1,234,567.) Outflow Coupon bonds $1755000 Inflow Zero coupon bonds
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