The bonds would be used to fund a $40,000,000 initiative for a company.

Years to maturity: 25

Required return: 5.25%

Amount needed: $40,000,000

Face value: $1,000

Coupon rate: 5.75%

Tax rate: 21%

Year bond is called: 8

Spread above Treasury: 0.40%

Treasury rate at call: 4.80%

Treasury rate at call: 6.20%

The firm is considering issuing either a coupon bond (info above) or a zero coupon bond. The yield on either will be 5.25%. The face value is the same for both bonds.

Use the information above to calculate the value of coupon bond, zero coupon bond, of coupons needed and zero coupons needed.