there are 3 questions. i would appreciate step by step solution with explanation for the computation part. Fun Mobile is debating whether it should...
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there are 3 questions. i would appreciate step by step solution with

explanation for the computation part. Fun Mobile is debating whether it should repay a $75 million, 12% yield, 30-year bond issued five years ago. It is amortizing $5 million in flotation expenses over the 30-year term of the 12% bonds. Fun's investment banks have stated that the firm may be able to sell a new 25-year bond at a 10% coupon in today's market. Neither they nor Fun's company see interest rates falling below 10% in the near future, but there is a possibility that rates may rise. To repay the existing bonds, a call premium of 12% would be needed, and the new issuance would incur $5 million in flotation expenses. Fun's marginal federal-state combined tax rate is 40%. The new bonds would be sold one month before to the maturity of the existing bonds, with the proceeds placed in short-term government bonds yielding 6% annually during the interim. Prepare complete bond refunding analysis. What is the NPV? What considerations might sway Fun's choice to refund immediately rather than later? The SEC works to safeguard investors acquiring freshly issued securities by ensuring that the information released by companies and their investment banks is accurate and not misleading. However, since the SEC does not make any comment on the true worth of shares, an investor may overpay for a new stock and thus lose a lot of money. Do you believe the SEC should provide investors with a judgment on the right valuation of new stock or bond offerings? Justify. Financial institutions thoroughly consider the businesses whose securities they underwrites before engaging into a formal arrangement; this applies in particular to companies' issues, which are public for the first time. Since the banks themselves are not planning to keep securities, but want to offer them to anyone else, why are they so worried about carrying out meticulous investigations?

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