Tesla Corporation needs to raise funds to finance a plant expansion, and it has decided to issue 30-year zero-coupon bonds to raise the money.

The required return on the bonds will be 9 percent.

a. What will these bonds sell for at issuance

b. Using the IRS amortization rule, what interest deduction can the company take on these bonds in the first year? In the last year?

c. Interest deduction. Using the straight-line method, what interest deduction can the company take on these bonds in the first year? In the last year?.

d. Based on your answers in (b) and (c), which interest deduction method would Tesla Corporation adopt?