Question: Check my work Problem 16-20 (Modified) The Harding Corporation has $52 million of bonds outstanding that were issued at a coupon rate of 13.25 percent

Check my work Problem 16-20 (Modified) The Harding Corporation has $52

Check my work Problem 16-20 (Modified) The Harding Corporation has $52 million of bonds outstanding that were issued at a coupon rate of 13.25 percent seven years ago. Interest rates have fallen to 12 percent. Preston Alter, the vice-president of finance, does not expect rates to fall any further. The bonds have 18 years left to maturity, and Preston would like to refund the bonds with a new issue of equal amount also having 18 years to maturity. The Harding Corporation has a tax rate of 25 percent. The underwriting cost on the old issue was 4.5 percent of the total bond value. The underwriting cost on the new issue will be 1.8 percent of the total bond value. The premium for calling the bond early is 7.5 percent. Use Appendix D. a. Compute the discount rate. (Round the final answer to 2 decimal places.) Discount rate 9.00 % b. Calculate the present value of total outflows. (Enter the answers in whole dollars, not in millions. Round "PV Factor" to 3 decimal places. Do not round intermediate calculations. Round the final answer to nearest whole dollar.) Total outflows $ 4653964 c. Calculate the present value of total inflows. (Enter the answers in whole dollars, not in millions. Round "PV Factor" to 3 decimal places. Do not round Intermediate calculations. Round the final answer to nearest whole dollar.) Total inflows $ d. Calculate the net present value. (Enter the answers in whole dollars, not in millions. Round "PV Factor" to 3 decimal places. Do not round intermediate calculations. Round the final answer to nearest whole dollar. Negative amount should be indicated by a minus sign.) Net present value $ e. Should the Harding Corporation refund the old issue? O No

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

The adjusted trial balance for Sharp Construction as of December 31, 2011, follows. J. Sharp invested $50,000 cash in the business during year 2011 (the December 31, 2010, credit balance of the J....

Problem 16-20 (modified) The Harding Corporation has $51.5 million of bonds outstanding that were issued at a coupon rate of 10.75 percent seven years ago. Interest rates have fallen to 9.3 percent....

Problem 16-20 (Modified) The Harding Corporation has $50.7 million of bonds outstanding that were issued at a coupon rate of 10.25 percent seven years ago Interest rates have fallen to 9 percent....

Problem 16-20 (modified) The Harding Corporation has $51.6 million of bonds outstanding that were issued at a coupon rate of 11.25 percent seven years ago. Interest rates have fallen to 9.7 percent....

Problem 16-20 Problem 16-20 (Modified) The Harding Corporation has $51.9 million of bonds outstanding that were issued at a coupon rate of 12.75 percent seven years ago. Interest rates have fallen to...

Problem 16-20 (Modified) The Harding Corporation has $51.5 million of bonds outstanding that were issued at a coupon rate of 10.75 percent seven years ago Interest rates have fallen to 9.5 percent....

Problem 16-20 (Modified) The Harding Corporation has $51.9 million of bonds outstanding that were issued at a coupon rate of 1275 percent seven years ago. Interest rates have fallen to 11.5 percent...

Problem 16-20 (Modified) The Harding Corporation has $50.5 million of bonds outstanding that were issued at a coupon rate of 1275 percent seven years ago. Interest rates have fallen to 11.5 percent....

Problem 16-20 (Modified) The Harding Corporation has $51.5 million of bonds outstanding that were issued at a coupon rate of 10.75 percent seven years ago. Interest rates have fallen to 9.5 percent....

Problem 16-20 (Modified) The Harding Corporation has $50.3 million of bonds outstanding that were issued at a coupon rate of 11.75 percent seven years ago Interest rates have fallen to 10.5 percent....

Only a is correct other results are wrong..Can you calculate Total outflows,total inflows and net present value.. Problem 16-20 (Modified) The Harding Corporation has $50.7 million of bonds...

What are the codes to a Python program that will ask a user what the x-coordinate and y-coordinate of their position is on a traditional Cartesian coordinate system. The program then will, using...

4. Solve the following differential equations by separation of variables: (a) (b) (c) (d) ey dy dx da = dy 1 + x dy dx = =e-y+e-x-y. et dy da = 2x. xy+2y-x-2 xy-3y+x-3

answer this UR UE previous Page Page 9 of 16 Question 9 (3 points) In adaptive (or agile) project management, the project's execution phase is divided up into distinct sub-phases often known as...

A company is preparing completing their Cash Budget. The following data has been prepared for cash receipts and payments. January February March Cash receipts $1,061,200 $1,182,400 $1,091,700 Cash...