The Robinson Corporation has $29 million of bonds outstanding that were issued at a coupon rate of 11.150 percent seven years ago. Interest rates have fallen to 10.650 percent. Mr. Brooks, the Vice-President of Finance, does not expect rates to fall any further. The bonds have 17 years left to maturity, and Mr. Brooks would like to refund the bonds with a new issue of equal amount also having 17 years to maturity. The Robinson Corporation has a tax rate of 30 percent. The underwriting cost on the old issue was 2.90 percent of the total bond value. The underwriting cost on the new issue will be 1.90 percent of the total bond value. The original bond indenture contained a five-year protection against a call, with a call premium of 7 percent 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 for an approximate answer but calculate your final answer using the formula and financial calculator methods. Assume the discount rate is equal to the aftertax cost of new debt rounded up to the nearest whole percent (e.g. 4.06 percent should be rounded up to 5 percent)

a. Compute the discount rate. (Do not round intermediate calculations. Input your answer as a percent rounded up to the nearest whole percent.)

b. Calculate the present value of total outflows. (Do not round intermediate calculations and round your answer to 2 decimal places.)

c. Calculate the present value of total inflows. (Do not round intermediate calculations and round your answer to 2 decimal places.)

d. Calculate the net present value. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places.)

Ian has $29 ml The Robinson Corporat on ot bonds outstandng at were ssued at a coupon rate ot bl percent seven years ago. Interest rates have talen to 10.600 perce Mr. Brogk VIce-Presdent ot Finance, does not expect rates to talany further The bonds have 17 years left to maturity, and Mr Brooks would like rerund the bonds with 3 new issue of equal amou also having 17 years to maturity. The Robinson Corporation has 3 tax rate of 30 percent The underwriting cost on the old e was 290 percent o e total bond value. The underwnting co e issue will be 90 percent of the total bond The inalbond Indenture contained a nve-year protocton against a a cal premum of 7 percent starting in the 3 th yoar and scheduled to decino by one-half percent each year thereafter. org up to the nearest whole percent (e.g. 4.06 percent should be rounded up to 5 percent a. Compute the discount rate. (Do not round intermediate calculations. Input your answer as a percent rounded up to the nearest whole percent.) b. Calculato tho prose of total outflow3. (Do not round Intermediate calculations and round your answerto 2 declmal places PW urtulal c. Calculate the present walue of iotal infaws. (Do not round intermediate calculations and round your answer to 2 decimal places- d. Calculato th0 nct prc30nt valuc. (Negative amount should be Indlcated by a minus slgn. Do not round ntermediate calculations and round your answer to 2 declmal places