The Harding Corporation has $50.6 million of bonds outstanding that were issued at a coupon rate of 13.25 percent seven years ago. Interest rates have fallen to 117 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 23 percent. The underwriting cost on the old issue was 3.1 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 Annendix 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 outfiows 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 $ 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 dollor. Negative amount should be indicated by a minus sign.) Net present value e. Should the Harding Corporation refund the old issue? Yes O No 1911 NU 000 05 1517 + 1656 16 19 2 SENE FOR 65166 TI IO SECTOR CHIE MI ott 1997 266+ 15 15 15 13 O HYLH 1561 ELL 6 SLO SI CCC MOS 5511 SELE SI DOT ST 567 AT SOSSES I LL5501 1591 94 LA CEE 600 TET 1 6529995 1609 19 19 OCEL THE LO SES 01 HOM Tous CH CESE FIT 61 LOE MOET 1015 * $ 66 SO SOLLE 16 IS OCH 04 LEM CHE tt OSS 755 TS 169 05 1069 1 OS FOR 6 WO SI! PERE CH AI 66113 CET HOS ES RSS COOL HOR OF OT PETE CH5H 16 tot 106 ST 1167 TEST 02 OEM 0011 NH 11 11 SOFT NOW SOP 199 sur 1 More NE HH 40 HCS IS THE 10 TILE OD BITI 1661 TO 70105 000 IS ELT OLT 061158 TOTO IT: 03 NE 11 ES (301 HT 18 tot 119 18 15 16 1911 PE W 4 1 to WE I HEA LEO 09 PO Hitt H+ OH HO OWE 1761 410 OCH 09 TIF 18+ SHE 1 W GIE E RE 16 17 18 165 CEL VE IT tot ont AICS 100 OT THE SCENES HEM HESS LEYOTE WENT 1080 WIERT WERE NOW HE TH V 109 169 ZEE BENE TOT OP TEE LE OFICE WINE TOOTE TIETOT ALE st PIT HE HIT 1 ST 191 KEE ASLI B01 ESET CH 1900 HOW TO 10 HO HO 1080 6060 HO NO 160 1958 wer wel VI WI W 1 SIL v PRINE --- - sen a XIAN3dd