Assume the role of Hank Pym, accountant and CEO for Wasp Woman Inc. As of December 31, 2021 Wasp Woman has just finished up a major project for which they had issued debt securities to raise the necessary funds. The $250 million in annual bonds was issued on January 1, 2008 with a coupon rate of 8.75% (paid annually) for 99.33. The bonds are due on December 31, 2047. Now that the project is completed, they are in a position to refinance the debt dependent on your suggestions. Wasp Woman's main concern is to show the most positive income for the current period in attempt to show that their project was worthwhile. If they refund an equal par debt, their desired annual payment is $20 million and they would prefer to make the payments on a semiannual basis. The new issue would keep the December 31, 2047 due date.

They have asked that you provide them with your suggestions for the timing of the refinance and a complete accounting of the transactions that will occur. They have also asked that you provide a comparative (with and without the bond repurchase and reissue) set of financial statements showing how the financials would be impacted by the transactions.

Determine the rate at which you would refund in order to achieve the objectives in this setting. Provide the JE's of the repurchase and refunding transactions.