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K.I.L. Company has issued 100 million in bonds 8 years ago with a 15 year maturity and a coupon rate of 11% pa. The bond issue contains a call provision of 10%. If recalled the bond will take 30 days to recall. Underwriting costs for the new bond issue are two million. Short term interest rates are at 6% and long term interest rates are currently offered at 10%. K.I.L.'s tax rate is 40%. Should ABC refund the bond? Please outline your calculations.



Umpany is UNSTUering Buying or leasing a $350,000 machine that has a seven year life. The salvage value of the machine after
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