Suppose your company needs to raise $19 million and you want to issue 25-year bonds for this purpose. assume the required return on your bond issue will be 10 percent, and you're evaluating two issue alternatives: a 10 percent semiannual coupon bond and a zero coupon bond. your company's tax rate is 31 percent.

normal bonds: $19,000,000 = 19,000 bonds

zero coupon bond: $24,366,207.91 dollars = 24,367 bonds

Explanation:

For the zero coupon bond, we will need to calculate the value which discounted at 10% per year during 25 years equals 19,000,000:

Principal19,000,000.00

time25.00

rate0.01000

Amount24,366,207.91

For the normal bonds, the company will issue the bonds at par the bond rate matches the market rate. It will issue for a face value of 19,000,000

where is the graph?