bondholders are fully aware of these costs, what will the debtholders pay for the debt? The interest rate on the bonds is 7%. A. $35.51 B. $38.00 C. $48.59 21. Kowloon TV Mall has an outstanding bond callable at $1,340. The total value of the bond is $100 million. The company determines issuing a new bond and use the proceeds to buy back the above bond, with transaction cost is $1,310,000. Suppose the tax rate is 30%. Based on the information given above, the total after-tax cost of refunding is approximately A. $24.7 million. B. $42.5 million. C. $185.5 million. 22. If a firm retires or extinguishes a debt issue before maturity, the total specific amount they pay is: A. the call premium. B. the call price. C. the sinking fund. 23. Quick-Quick-Move Logistics Company has an outstanding perpetual callable bond. The bond makes annual coupon payment, and the coupon rate is 4%. It can be called in one year. The call price will be $1,110 if it is called. There is a 35% chance that the long-term interest rate in one year will be 5.5% and 65% chance that the interest rate will be 3.3%. The current interest rate is 4%. A. the bond will be called as soon as the contract allows. B. the bond will not be called even though the contract allows. C. this is unable to determine whether the bond will be called or not when the contract allows