What is the myopic benefit of refunding

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

Questions Cloud

Correcting and adjusting entries : Floppy is a small company and records adjusting entries & closing entries only at fiscal (calendar) year end. Correcting and adjusting entries have not been recorded

Can you explain why these trends are observed : How does the choice of multiplier, modulus, and hashMapSize affect the number of collisions seen and the number of hops the probe needs to make and why are these factors important for implementations which will be used by real world applications?

Influence of a central force : A body of mass 2 kg is moving under the influence of a central force whose potential energy is given by U (r) = 2r3 Joule. If the body is moving in a circular orbit of 5m,then find its energy.

What is the upward force exerted by the ground : What is the upward force exerted by the ground on him treating it as a constant? Find work done by normal reaction from ground.

What is the myopic benefit of refunding : A firm has a perpetual callable bond outstanding with a par value $100 and an annual coupon of $14. What is the myopic benefit of refunding?

Centre of mass of system of the two masses : Two bodies of same mass tied with an inelastic string of length l lie together. One of them is projected vertically upwards with velocity root 6gl . Find the maximum height up to which the centre of mass of system of the two masses rises.

Fixed selling and administrative expenses : The company sold 35,000 units in the East region and 10,000 units in the West region. It determined that $240,000 of its fixed selling and administrative expenses is traceable to the West region, $190,000 is traceable to the East region, and the rema..

Maximum distance along the ladder : What is the maximum distance along the ladder a person of mass 15M can climb before the ladder starts to slip?

Interest with the market interest rate : Issue a 5-year bond, interest paid biannually, with 8% stated interest with the market interest rate at 6%

User Account

All Pages