What is the myopic benefit of refunding

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Reference no: EM13912542

A firm has a perpetual callable bond outstanding with a par value $100 and an annual coupon of $14. The firm can refund this a new non callable bond having 8% coupon. call price on old bond issue is $114. flotation costs for new issue are 2% of par value. What is the myopic benefit of refunding?

Reference no: EM13912542

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