Question: Martis Corp. has a Php 100 million, 12% bond issue outstanding that has 20 years to maturity. The call premium is 6% of face value.

Martis Corp. has a Php 100 million, 12% bond issue outstanding that has 20 years to maturity. The call premium is 6% of face value. If bond refunding would be applied at a 10% with flotation costs that is 1% of the total value of the securities.

How much is the Net Present Value Savings for the refunding?

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