Saved This question will be sent to your instructor for grading. Zipline Ltd is considering whether to repay its old bonds with a new bond issue. The old $25 million bonds carry a coupon rate of 12%, paid annually, and were issued 8 years ago with 20 years to maturity. It has a call premium of 6% above par value. Current long-term rates are 8% per annum and treasury bill rates are 2%. Underwriting costs on the old issue amounted to $300,000 however due to increased broker fees underwriting cost on the new issue woul It is expected that there would be an overlap period of one month. The company is in the 40% tax bracket. Required: Advise Zipline Ltd. on whether they should refund the issue and why. (15 marks) Enter your response in the box below. Show your supporting calculations by uploading a file attachment in the question following. Short Answer Toolbar navigation B I U = = = EE: Saved This question will be sent to your instructor for grading. Zipline Ltd is considering whether to repay its old bonds with a new bond issue. The old $25 million bonds carry a coupon rate of 12%, paid annually, and were issued 8 years ago with 20 years to maturity. It has a call premium of 6% above par value. Current long-term rates are 8% per annum and treasury bill rates are 2%. Underwriting costs on the old issue amounted to $300,000 however due to increased broker fees underwriting cost on the new issue woul It is expected that there would be an overlap period of one month. The company is in the 40% tax bracket. Required: Advise Zipline Ltd. on whether they should refund the issue and why. (15 marks) Enter your response in the box below. Show your supporting calculations by uploading a file attachment in the question following. Short Answer Toolbar navigation B I U = = = EE