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Give the answer of a,b,c and d written answers are wrong. The Harding Corporation has $50.8 million of bonds outstanding that were Issued at a

Give the answer of a,b,c and d written answers are wrong. image text in transcribed
The Harding Corporation has $50.8 million of bonds outstanding that were Issued at a coupon rate of 10.75 percent seven years ago. Interest rates have fallen to 9.3 percent. Preston Alter, the vice-president of finance, does not expect rates to fall any further, The bonds have 18 years left to maturity, and Preston would like to refund the bonds with a new issue of equal amount also having 18 years to maturity. The Harding Corporation has a tax rate of 25.0 percent. The underwriting cost on the old issue was 3.3 percent of the total bond value. The underwriting cost on the new issue will be 1.8 percent of the total bond value. The original bond indenture contained a five-year protection against a call, with an 8 percent call premium starting in the sixth year and scheduled to decline by one half percent each year thereafter (Consider the bond to be seven years old for purposes of computing the premium). Use Aprendix D. a. Compute the discount rate. (Round the final answer to 2 decimal places.) Discount rate b. Calculate the present value of total outflows. (Enter the answers in whole dollars, not in millions. Round "PV Factor" to 3 decimal places. Do not round intermediate calculations. Round the finol answer to nearest whole dollor.) Total outhows c. Calculate the present value of total inflows. (Enter the answers in whole dollars, not in millions. Round "PV Foctor" to 3 decimal places. Do not round intermediote calculations. Round the final answer to nearest whole dollor.) Total inflows d. Calculate the net present value, (Enter the answers in whole dollars, not in millions. Round "PV Factor" to 3 decimal places. Do not round intermediate calculations. Round the final answer to nearest whole dollar. Negative amount should be indicated by a minus sign.) Net present value

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