Not yet wered Fundit Inc. is considering whether to refund a 540 million, 145...
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Not yet wered Fundit Inc. is considering whether to refund a 540 million, 145 coupon, 30-year bond that was sold 5 years ago. Fuindi investment dans have indicated that current yields on 25-year bonds of similar riskare 11.67%. A call premium of 75% would be required to retire the old bonds, and Rotation costs on the new issue would amount to $3.5 milion Fundit's marginal tax rate is 40%. The new bonds would be issued 15 months before the old bonds were called, with the proceeds being invested in short-term government securities returningaly. What is the bond refunding NPV? Med out of 100
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