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New York Water (NYW) is considering whether to refund a $5million, 12 percent coupon, 30-year bond issue that was sold 5years ago. It is amortizing $300,000 of flotation costs on the 12percent bonds over the 30-year life of that issue. NYW's investmentbankers have indicated that the company could sell a new 25-yearissue at an interest rate of 9 percent in today's market. A callpremium of 10 percent would be required to retire the old bonds,and flotation costs on the new issue would amount to $400,000.NYW's marginal tax rate is 40 percent. The new bonds would beissued at the same time the old bonds were called.What is the relevant refunding investment outlay at t=0?$425,000$500,000$600,000$750,000$800,000What are the relevant annual interest savings for NYW ifrefunding takes place?$50,000$70,000$90,000$115,000$125,000What are the relevant annual flotation cost tax effects for NYWif refunding takes place?$800$1,000$1,500$2,400$3,000What is the NYW bond refunding's NPV?$525,641$651,635$729,962$824,258$858,334