Suppose your company needs to raise 44 million and you want


Suppose your company needs to raise $44 million and you want to issue 20-year bonds for this purpose. Assume the required return on your bond issue will be 8 percent, and you’re evaluating two issue alternatives: A 8 percent semi-annual coupon bond and a zero coupon bond. Your company’s tax rate is 40 percent. a-1. How many of the coupon bonds would you need to issue to raise the $44 million? Number of coupon bonds a-2. How many of the zeroes would you need to issue? (Round your answer to 2 decimal places (e.g., 32.16)) Number of zero coupon bonds b-1. In 20 years, what will your company’s repayment be if you issue the coupon bonds? (Enter your answer in dollars, not millions of dollars, i.e. 1,234,567.) Coupon bonds repayment $ b-2. What if you issue the zeroes? (Enter your answer in dollars, not millions of dollars, i.e. 1,234,567.) Zeroes repayment $ c. Calculate the after tax cash flows for the first year for each bond

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Financial Management: Suppose your company needs to raise 44 million and you want
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