A firm has $45,000,000 of preferred shares outstanding that have a yield of 10% on par and are callable at a 3% premium. New issues will cost $980,000 in issuing and underwriting expenses. Required: a) At what interest rate would the firm want to refinance? b) If the dividend yield drops to 8%, then how long will it take before the present value of the interest savings exceeds the cost of refinancing?