Bosion Ltd is raising debt capital and has asked you for advice on two options they have identified: 1.A15-year zero coupon bond. Bosion Central will receive $10,000,000 today and will repay $18,468,924 in exactly 15 years. 2. A 15-year bank loan with monthly payments. The bank rate on this loan is 4.0% p.a. compounded monthly. Both options have the same upfront fees. 

Provide a recommendation for Bosion on which option is financially most attractive and an Explanation?

Answer rating: 100% (QA)

Option 1 15year zero coupon bond yield rate 417 Repayment Maturity ... View the full answer