The Harding Corporation has $516 million of bonds outstanding that werewed at a couponi 75 Interest rates have fallen to 10 percent. Preston Nter, the vice president of Trance, does expedite the have 18 years left to maturity, and Preston would like to refund the bonds with a new of maturity. The Harding Corporation has a tax rate of 25 percent. The underving cost.on the oldes Alper bond value. The underwriting cost on the new we will be 18 percent of the total bond vahe The a five-year protection against a call, with an 8 percent call premium starting in the sath year and scheded to decine et percent each year thereafter (Consider the bond to be seven years old for purposes of computing the prema se Boom 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 million. Round "PV Factor to 3 dec places. Do not round intermedinte calculations. Round the final answer to nearest whole dollar) $ Total outflows c. Calculate the present value inflows. (Enter the answers in whole dollars, not in millions. Round "PV Foctor 3 places. Do not round intermediate calculations. Round the final answer to nearest whole dollat.) $ Total inflows d. Calculate the net present value. (Enter the answers in whole dollars, not in millions. Round "PV Factor" 10 3 decim not round intermediate calculations. Round the final answer to nearest whole dollar. Negative amount should be ine minus sign.) The Harding Corporation has $516 million of bonds outstanding that werewed at a couponi 75 Interest rates have fallen to 10 percent. Preston Nter, the vice president of Trance, does expedite the have 18 years left to maturity, and Preston would like to refund the bonds with a new of maturity. The Harding Corporation has a tax rate of 25 percent. The underving cost.on the oldes Alper bond value. The underwriting cost on the new we will be 18 percent of the total bond vahe The a five-year protection against a call, with an 8 percent call premium starting in the sath year and scheded to decine et percent each year thereafter (Consider the bond to be seven years old for purposes of computing the prema se Boom 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 million. Round "PV Factor to 3 dec places. Do not round intermedinte calculations. Round the final answer to nearest whole dollar) $ Total outflows c. Calculate the present value inflows. (Enter the answers in whole dollars, not in millions. Round "PV Foctor 3 places. Do not round intermediate calculations. Round the final answer to nearest whole dollat.) $ Total inflows d. Calculate the net present value. (Enter the answers in whole dollars, not in millions. Round "PV Factor" 10 3 decim not round intermediate calculations. Round the final answer to nearest whole dollar. Negative amount should be ine minus sign.)
