Question: please show steps, my NPV is $1,086,029, please verify it. thanks! Labs Inc. has a bond outstanding that carries a 10% coupon rate paid annually.

please show steps,

my NPV is $1,086,029, please verify it. thanks!

Labs Inc. has a bond outstanding that carries a 10% coupon rate paid annually. Current bonds are yielding 7.5%. It has $30 million outstanding and 12 years left to maturity. A new issue would require $500,000 for floatation costs. An overlap period of 30 days would be anticipated, during which money market rates would be 2.5%. DNA Labs Inc. has a tax rate of 30%. The call premium on the outstanding issue is currently at 10%. Should the bonds be refunded?

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