One year ago Green Inc., issued $100 million of 11-year bonds with a 9.5% coupon payable annually.
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One year ago Green Inc., issued $100 million of 11-year bonds with a 9.5% coupon payable annually. The first coupon payment has just been paid. The bonds are callable at 105 beginning today. Floatation costs on that issue were $1 million. Green Inc. has a 38% marginal tax rate. Since interest rates have fallen, Green Inc. is considering calling in the bonds and refinancing at current rates. It has two, ten-year, financing alternatives.
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