Problem 16-20 (Modified) The Harding Corporation has $50.7 million of bonds outstanding that were issued at a coupon rate of 10.25 percent seven years ago Interest rates have fallen to 9 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 3.2 percent of the total bond value. The underwriting cost on the new Issue will be 1.8 percent of the total bond value. The prerjum for calling the bond early is 75 percent. Use Appendix D. 4. 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 millons. Round "PV Fettor* to 3 decimal places. Do not round Intermedlate 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 mllllons. Round "PV Fector" to 3 decimal places. Do not found Intermedlate calculations. Round the final answer to nearest whole dollar.) Total Inflans d. Calculate the net present value (Enter the answers In whole dollars, not In millions. Round "PV Factor" 10 3 decimal ples. Do not round Intermedlate calculations. Round the final answer to nearest whole dollar. Negative amount should be Indicated by a minus sign.) Net present value 4. Should the Harding Corporation refund the old issue? O No 6 Yes Problem 16-20 (Modified) The Harding Corporation has $50.7 million of bonds outstanding that were issued at a coupon rate of 10.25 percent seven years ago Interest rates have fallen to 9 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 3.2 percent of the total bond value. The underwriting cost on the new Issue will be 1.8 percent of the total bond value. The prerjum for calling the bond early is 75 percent. Use Appendix D. 4. 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 millons. Round "PV Fettor* to 3 decimal places. Do not round Intermedlate 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 mllllons. Round "PV Fector" to 3 decimal places. Do not found Intermedlate calculations. Round the final answer to nearest whole dollar.) Total Inflans d. Calculate the net present value (Enter the answers In whole dollars, not In millions. Round "PV Factor" 10 3 decimal ples. Do not round Intermedlate calculations. Round the final answer to nearest whole dollar. Negative amount should be Indicated by a minus sign.) Net present value 4. Should the Harding Corporation refund the old issue? O No 6 Yes