1)The Wagner Corporation has a $29 million bond obligation outstanding, which it is considering refunding. Though the bonds were initially issued at 16 percent, the interest rates on similar issues have declined to 13.3 percent. The bonds were originally issued for 25 years and have 21 years remaining. The new issue would be for 21 years. There is a 8 percent call premium on the old issue. The underwriting cost on the new $29 millionissue is $640,000, and the underwriting cost on the old issue was $490,000. The company is in a 40 percent tax bracket, and it will allow an overlap period of one month (1/12 of the year). Treasury bills currently yield 5 percent.(Do not round intermediate calculations. Enter the answers in whole dollars, not in millions. Round the final answers to nearest whole dollar.)

a.Calculate the present value of total outflows.

Total outflows$

b.Calculate the present value of total inflows.

Total inflows$

c.Calculate the net present value.

Netpresent value$

d.Should the old issue be refunded with new debt?

2)The Hegan Corporation plans to lease a $820,000 asset to the Doby Corporation. The lease will be for 12 years. Lease payments are payable at the beginning of the year. UseAppendix D.

a.If the Hegan Corporation desires a 14 percent return on its investment, how much should the lease payments be?(Round "PV Factor" to 3 decimal places. Round the final answer to nearest whole dollar.)

Lease payment$

b.If the Hegan Corporation is able to generate $125,000 in immediate tax shield benefits from the asset to be purchased for the lease arrangement and will pass the benefits along to the Doby Corporation in the form of lower lease payments, how much should the revised lease payments be? Continue to assume the Hegan Corporation desires a 14 percent return on the 12-year lease.(Round the final answer to nearest whole dollar.)

Revised lease payment

3)The Garland Corporation has a bond outstanding with a $60 annual interest with semiannual payment, a market price of $850, and a maturity date in 10 years. Assume the par value of the bonds is $1,000.

Find the following: UseAppendix BandAppendix C.(Do not round your intermediate calculations. Round the final answers to 2 decimal places.)

a. The coupon rate%

b. The current yield%

c. The yield to maturity%

d. The yield an investor would realize if coupon payments were

reinvested at 8 percent (holding period return)%