Lopez information systems is planning to issue ten-year


Lopez Information Systems is planning to issue ten-year bonds. The going market rate for such bonds is 8.125 percent. Assume that coupon payments will be made semiannually. The firm is trying to decide between issuing an 8 percent coupon bond or a zero coupon bond. The company needs to raise $1 million.

A. What will be the price of an 8 percent coupon bonds?

B. How many coupon bonds would have to be issued?

C. What will be the price of the zero coupon bonds?

D. How many zero coupon bonds will have to be issued?

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Financial Management: Lopez information systems is planning to issue ten-year
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