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Suppose your company needs to raise $45 million and you want to issue 30-year bonds for this purpose. Assume the required return on your bond issue will be 6 percent, and you’re evaluating two issue alternatives: A 6 percent semiannual coupon bond and a zero coupon bond. Your company’s tax rate is 35 percent. a-1. How many of the coupon bonds would you need to issue to raise the $45 million? How many of the zeroes would you need to issue? a-3.In 30 years, what will your company’s repayment be if you issue the coupon bonds?a-4.What if you issue the zeroes?a-5Calculate the aftertax cash flows for the first year for each bond (coupin bonds, zero coupon bonds)(Please show solution with formulas)

Financial Management, Finance

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