Merlion international is an all equity company. With changing market conditions, it intends to restructure its balance sheet. With this idea, it wants to issue corporate bonds and use some of its proceeds to buy back shares from the market. the company wants to issue non callable bonds that promises to pay its subscribers 4.5 percent bi-annual coupon with 15 years of maturity. The required rate of return on the bond, which is also the bond’s discount rate is 6.8 percent. The company intends to issue the bonds at ongoing market price and not at its face value. The face value of the bonds can be assumed to be $1000 per bond and the company intends to issue 10,000 such bonds.
