Charles River Associates is considering whether to refinance either of the two perpetual bond issues the company

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Charles River Associates is considering whether to refinance either of the two perpetual bond issues the company currently has outstanding. Here is information about the two bond issues:

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Corporate Finance

ISBN: 9780077173630

3rd Edition

Authors: David Hillier, Stephen A. Ross, Randolph W. Westerfield, Bradford D. Jordan, Jeffrey F. Jaffe

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Question Posted: Feb 22, 2024 03:03 AM

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Charles River Associates is considering whether to refinance either of the two perpetual bond issues the company

Question:

Coupon rate Value outstanding Call premium Transaction cost of refunding Current interest rate Bond A 8% 75,000,000 8.5% 10,000,000 7% Bond B 9% 87,500,000 9.5% 12,000,000 7.25%

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After calculating the NPV of refunding for both bonds it ...View the full answer

Corporate Finance

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