E9.23 Retiring Debt Early. Smith & Company issued $100 million maturity value of six-year bonds, which car- ried a coupon rate of six percent and paid interest semiannually. At the time of the offering, the yield rate for equivalent risk-rated securities was eight percent. Two years later, market yield rates had risen to ten percent, and since the company no longer needed the debt financing, executives at Smith & Company decided to retire the debt. Calculate the gain or loss that Smith & Company will incur as a consequence of retiring the debt early. Is the early retirement of the debt a good decision? What factors should be considered in making this decision? E9.22 Issuing Zero-Coupon Bonds. On July 28, 2016, Shannon Corporation, a biotechnology firm located in Virginia, completed a private placement of zero-coupon convertible subordinated debentures. The zero-coupon debentures were issued at a price of $551.26 per $1,000 principal amount at maturity. Although the zero- coupon bonds paid no periodic interest payments, interest was assumed to be compounded semiannually. The bonds mature in 2036. Estimate the yield rate on the zero-coupon bonds at the time of issuance. Why would Shannon Corpora- tion issue non-interest-bearing bonds? Why would Shannon attach a conversion feature to the zero-coupon bonds? Calculate Shannon's implicit interest expense for the first year