Imagination Dragons Corporation needs to raise funds to finance a plant expansion, and it has decided...

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Finance

Imagination Dragons Corporation needs to raise funds to financea plant expansion, and it has decided to issue 25-year zero couponbonds with a par value of $1,000 each to raise the money. Therequired return on the bonds will be 8 percent. Assume semiannualcompounding periods.
a.
What will these bonds sell for at issuance? (Do notround intermediate calculations and round your answer to 2 decimalplaces, e.g., 32.16.)
b. Using the IRSamortization rule, what interest deduction can the company take onthese bonds in the first year? In the last year? (Do notround intermediate calculations and round your answers to 2 decimalplaces, e.g., 32.16.)
c. Repeat part (b)using the straight-line method for the interest deduction.(Do not round intermediate calculations and round youranswer to 2 decimal places, e.g., 32.16.)

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Answer a Par value 1000 Semiannual interest 8 2 4 Number of semiannual periods 25 2 50 PV FV 1 Periodic Interest rate Number of periods 1000 1 4 50 1407126 These value the bonds will sell for at issuance 14071 Answer b As See Answer

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Imagination Dragons Corporation needs to raise funds to financea plant expansion, and it has decided to issue 25-year zero couponbonds with a par value of $1,000 each to raise the money. Therequired return on the bonds will be 8 percent. Assume semiannualcompounding periods.a.What will these bonds sell for at issuance? (Do notround intermediate calculations and round your answer to 2 decimalplaces, e.g., 32.16.)b.Using the IRSamortization rule, what interest deduction can the company take onthese bonds in the first year? In the last year? (Do notround intermediate calculations and round your answers to 2 decimalplaces, e.g., 32.16.)c.Repeat part (b)using the straight-line method for the interest deduction.(Do not round intermediate calculations and round youranswer to 2 decimal places, e.g., 32.16.)

a.	What will these bonds sell for at issuance? (Do notround intermediate calculations and round your answer to 2 decimalplaces, e.g., 32.16.)
b.	Using the IRSamortization rule, what interest deduction can the company take onthese bonds in the first year? In the last year? (Do notround intermediate calculations and round your answers to 2 decimalplaces, e.g., 32.16.)
c.	Repeat part (b)using the straight-line method for the interest deduction.(Do not round intermediate calculations and round youranswer to 2 decimal places, e.g., 32.16.)