Suppose your company needs to raise $54 million and you want to issue 25-year bonds for...

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Finance

Suppose your company needs to raise $54 million and you want toissue 25-year bonds for this purpose. Assume the required return onyour bond issue will be 4.8 percent, and you’re evaluating twoissue alternatives: A semiannual coupon bond with a coupon rate of4.8 percent and a zero coupon bond. Your company’s tax rate is 25percent. Both bonds will have a par value of $1,000.
a-1. How many of the coupon bonds would you need to issue to raisethe $54 million?
a-2. How many of the zeroes would you need to issue? (Do notround intermediate calculations and round your answer to 2 decimalplaces, e.g., 32.16.)
b-1. In 25 years, what will your company’s repayment be if you issuethe coupon bonds? (Do not round intermediate calculationsand enter your answer in dollars, not millions of dollars, e.g.,1,234,567.)
b-2. What if you issue the zeroes? (Do not roundintermediate calculations and enter your answer in dollars, notmillions of dollars, e.g., 1,234,567.)
c. Calculate the aftertax cash flows for the first year for eachbond. (Do not round intermediate calculations and enteryour answers in dollars, not millions of dollars, e.g.,1,234,567.)

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Suppose your company needs to raise $54 million and you want toissue 25-year bonds for this purpose. Assume the required return onyour bond issue will be 4.8 percent, and you’re evaluating twoissue alternatives: A semiannual coupon bond with a coupon rate of4.8 percent and a zero coupon bond. Your company’s tax rate is 25percent. Both bonds will have a par value of $1,000.a-1.How many of the coupon bonds would you need to issue to raisethe $54 million?a-2.How many of the zeroes would you need to issue? (Do notround intermediate calculations and round your answer to 2 decimalplaces, e.g., 32.16.)b-1.In 25 years, what will your company’s repayment be if you issuethe coupon bonds? (Do not round intermediate calculationsand enter your answer in dollars, not millions of dollars, e.g.,1,234,567.)b-2.What if you issue the zeroes? (Do not roundintermediate calculations and enter your answer in dollars, notmillions of dollars, e.g., 1,234,567.)c.Calculate the aftertax cash flows for the first year for eachbond. (Do not round intermediate calculations and enteryour answers in dollars, not millions of dollars, e.g.,1,234,567.)

a-1.	How many of the coupon bonds would you need to issue to raisethe $54 million?
a-2.	How many of the zeroes would you need to issue? (Do notround intermediate calculations and round your answer to 2 decimalplaces, e.g., 32.16.)
b-1.	In 25 years, what will your company’s repayment be if you issuethe coupon bonds? (Do not round intermediate calculationsand enter your answer in dollars, not millions of dollars, e.g.,1,234,567.)
b-2.	What if you issue the zeroes? (Do not roundintermediate calculations and enter your answer in dollars, notmillions of dollars, e.g., 1,234,567.)
c.	Calculate the aftertax cash flows for the first year for eachbond. (Do not round intermediate calculations and enteryour answers in dollars, not millions of dollars, e.g.,1,234,567.)