Waste Management, Unlimited (WM) has a $220 million, 9.2% coupon (paid semiannually), outstanding bond issue,...
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Waste Management, Unlimited (WM) has a $220 million, 9.2% coupon (paid semiannually), outstanding bond issue, which matures in exactly 8 years, and WM is considering refunding the debt. The call price per $1,000-par-value bond is $1,092. The replacement debt would have a 7.76% coupon (paid semiannually). The firm's tax rate is 30%. What is the net advantage to refunding (NA) in this case?
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