What will these bonds sell for at issuance

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Reference no: EM13266022

Pangaea Corporation needs to raise funds to finance a plant expansion, and it has decided to issue 25-year zero coupon bonds to raise the money. The required return on the bonds will be 7 percent.

a. What will these bonds sell for at issuance? (Round your answer to 2 decimal places. (e.g., 32.16))

b. Using the IRS amortization rule, what interest deduction can the company take on these bonds in the first year? In the last year?

Reference no: EM13266022

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