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Help Save & Ex Ched The Harding Corporation has $50.5 million of bonds outstanding that were issued at a coupon rate of 12.75 percent seven

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Help Save & Ex Ched The Harding Corporation has $50.5 million of bonds outstanding that were issued at a coupon rate of 12.75 percent seven years ago Interest rates have fallen to 11.5 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 30 percent. The underwriting cost on the old issue was 3.0 percent of the total bond value. The underwriting cost on the new issue will be 18 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 Appendix 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 final answer to nearest whole dollar) Total outflows $ c. Calculate the present value of total inflows. (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) 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 minus sign.) $

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