Suppose your company needs to raise $53 million and you want to issue 20-year bonds for this purpose. Assume the required return on your bond issue will be 8 percent, and youre evaluating two issue alternatives: A 8 percent semiannual coupon bond and a zero coupon bond. Your companys tax rate is 40 percent.

a-1.	How many of the coupon bonds would you need to issue to raise the $53 million?

Number of coupon bonds

a-2.	How many of the zeroes would you need to issue? (Round your answer to 2 decimal places. (e.g., 32.16))

Number of zero coupon bonds

b-1.	In 20 years, what will your companys 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

$

b-2.	What if you issue the zeroes? (Enter your answer in dollars, not millions of dollars, i.e. 1,234,567.)

Zeroes repayment

$

c.	Calculate the aftertax cash flows for the first year for each bond. (Enter your answer in dollars, not millions of dollars, i.e. 1,234,567.)

Coupon bonds	(Click to select)InflowOutflow	$
Zero coupon bonds	(Click to select)OutflowInflow	$