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CAN ANYONE HELP WITH THIS ONE PLS?? The Wagner Corporation has a $20 million bond obligation outstanding, which it is considering refunding. Though the bonds

CAN ANYONE HELP WITH THIS ONE PLS?? image text in transcribed
The Wagner Corporation has a $20 million bond obligation outstanding, which it is considering refunding. Though the bonds were Initially issued at 14 percent, the interest rates on similar issues have declined to 117 percent. The bonds were originally issued for 30 years and have 26 years remaining. The new issue would be for 26 years. There is a 9 percent call premium on the old issue. The underwriting cost on the new $20 million issue is $660,000, and the underwriting cost on the old issue was $510,000. 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 4 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 outfiows b. Calculate the present value of total inflows Total Inflows c. Calculate the net present value. Net present value d. Should the old issue be refunded with new debt? Yes No

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