You are considering refunding an outstanding bond. What would be the present value (after taxes) of the savings from the lower coupon payments given the following?

Years Left Until Maturity = 7 Years Current Annual Coupon Interest Rate = 11% Current $ of Outstanding Bonds = $60,000,000 Annual Coupon Interest Rate if Reissued= 8% Corporate Tax Rate = 40% Present Value Discount Rate = 4.8%

a) 4,196,555

b) 6,294,832

c) 6,371,649

d) 10,491,397