1. Moon Software Inc. is planning to issue two types of 25-year, noncallable bonds to raise a total of $4 million, $2 million from each type of bond. First, 2,000 bonds with a 10% semiannual coupon will be sold at their $1,000 par value to raise $2,000,000. These are called "par" bonds. Second, Original Issue Discount (OID) bonds, also with a 25-year maturity and a $1,000 par value, will be sold, but these bonds will have a semiannual coupon of only 6.25% (i.e., 3.125% every 6 months). The OID bonds must be offered at a price below par in order to provide investors with the same effective yield as the par bonds. How many OID bonds must the firm issue to raise $2,000,000? Round your final answer up to a whole number of bonds.

A. 3,211

B. 3,173

C. 3,126

D. 3,041

E. 3,012

2. You must estimate the intrinsic value of Lowell Technologies stock. The end-of-year free cash flow (FCF₁) is expected to be $30 million, and it is expected to grow at a constant rate of 5.0% a year thereafter. The companys WACC is 8.0%, it has $200 million of long-term debt plus preferred stock outstanding, and there are 20.0 million shares of common stock outstanding. What is the firm's estimated intrinsic value per share of common stock?

A. $34.00

B. $36.00

C. $38.00

D. $40.00

E. $42.00