Problem 7.29 – Bond Issuance Comparison: Coupon Bonds vs. Zero-Coupon Bonds

Fundamentals of Corporate Finance

Ross, Westerfield, and Jordan

13th Edition

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Difficulty – Medium

Determine the number of coupon and zero-coupon bonds required to raise a specific amount, the repayment amount after 20 years for each bond type, and the after-tax cash flows for the first year, given the required return, coupon rate, tax rate, and par value.

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