You are considering calling in existing bonds and issue a new set of bonds because the market interest rates have dropped significantly since you issued the current bonds. The current bonds pay an annual coupon of 12%. The market interest rate for long term securities has dropped to 8%. There are $20M in bonds outstanding and they have 10 years left to maturity. If we were to issue new bonds, wed incur underwriting costs of $250,000. Per the bond indenture, the call premium on the bonds is 15%. There will also be an overlap period of 2 months if new bonds are issued. The short term interest rate is 2.5%. The companys tax rate is 30%. Determine whether the bonds should be refunded.