Suppose your company needs to raise $55 million and you want toissue 25-year bonds for this purpose. Assume the required return onyour bond issue will be 7 percent, and you’re evaluating two issuealternatives: A semiannual coupon bond with a 7 percent coupon rateand a zero coupon bond. Your company’s tax rate is 30 percent.Assume a par value of $1,000. a-1. How many of the coupon bondswould you need to issue to raise the $55 million? (Do not roundintermediate calculations and round your answer to the nearestwhole number, e.g., 32.)

Number of coupon bonds?

a-2. How many of the zeroes would you need to issue? (Do notround intermediate calculations and round your answer to thenearest whole number, e.g., 32.)

Number of zero coupon bonds?

b-1. In 25 years, what will your company’s repayment be if youissue the coupon bonds? (Enter your answer in dollars, not millionsof dollars, e.g., 1,234,567. Do not round intermediate calculationsand round your answer to the nearest whole number, e.g., 32.)

Coupon bonds repayment?

b-2. What if you issue the zeroes? (Enter your answer indollars, not millions of dollars, e.g., 1,234,567. Do not roundintermediate calculations and round your answer to the nearestwhole number, e.g., 32.)

Zeroes repayment?

c. Calculate the firm’s aftertax cash outflows for the firstyear for each bond. (Enter your answers as positive values indollars, not millions of dollars, e.g., 1,234,567. Do not roundintermediate calculations and round your answers to the nearestwhole number, e.g., 32.)

Coupon bonds?

Zero coupon bonds?