Calculate Net Present Value of refunding the 1991 issue if the firms refunds on January 1, 1996. Use Table 1 or Table 2 as a guide for your analysis. -The 1991 bond is a 5 year callable bond. 11% coupon, 30 year, 75M (75,000 units of $1,000 par value bonds). The company can reissue new bonds at a coupon rate of 9.5%. This is a callable bond - had the bond not been callable the interest rate would have been 10.5% instead of 11%. If the bond is called on January 1, 1996 then an inital call premium of 11% or $110 per bond would have to be paid. However, the premium declines by 11%/25 = 0.44 percentage point, or $4.40, each year thereafter. Thus, if the bonds were called in 2001, the call premium would be (0.11/25)(20) = 8.8% or $88, where 20 represents the number of years remaining to maturity. Floatation costs on the 1991 issue totaled 1.5% of the face amount, or $1,125,000. The firm's federal-plus-state tax rate is 40%. You think you can issue new 25 year bonds at an interest rate of 9.5%. The floatation cost on the refunding issue would be 1% of the new issues face amount. Calculate the Net Present Value of refunding the 1991 issue. Table for guidance are below. Please show steps.