the underwriting cost is 1.3 million.,

sorry no extra payments

Watwon Maruulacturing taas $50 milion band cutstanding tiat carties a 12 percent coupon rate paid annsally. These bonds have s0 yeass to matuanty and a calll temein of 5.5%. Ai the yeld on cuirent bonds in 9.5% the company is considering tefunding their bonds. Anew issue would requite $13 million in underwiting cost as weil as 5300000 ie other deductible expenses, In addition, an overlap perlod of one month is anticipated, during which time money market rates would be 7 percent. The company has a tax tate of 40 percent. Actyise Watson Manutactiating whether or not they should refind the bond. Show all colculations. (\$8 marks) Watwon Maruulacturing taas $50 milion band cutstanding tiat carties a 12 percent coupon rate paid annsally. These bonds have s0 yeass to matuanty and a calll temein of 5.5%. Ai the yeld on cuirent bonds in 9.5% the company is considering tefunding their bonds. Anew issue would requite $13 million in underwiting cost as weil as 5300000 ie other deductible expenses, In addition, an overlap perlod of one month is anticipated, during which time money market rates would be 7 percent. The company has a tax tate of 40 percent. Actyise Watson Manutactiating whether or not they should refind the bond. Show all colculations. (\$8 marks)