A company needs to raise $22$ million and plans to issue $20-$year bonds for this purpose. The required rate of return is $7\mathrm{.}6$ percent in the current market. The company has two issue alternatives:a $7\mathrm{.}6$ percent coupon and a zero coupon bond. The companys tax rate is $34$ percent. At bond maturity, how much will the company need to pay its bondholders if it issues the coupon bonds? What if it issues the zeros? Assume semiannual compounding for both bond issuers.

Answer rating: 100% (QA)

Okay the question is asking about two scenarios issuing a coupon bond and issuing a zerocoupon bond ... View the full answer