Bond Refunding: Full NPV Calculation Step-by-Step

Learn how to calculate the full NPV of a bond refunding decision — including call premiums, flotation costs, overlap interest, and tax shields.

✅ What's covered:
- All cost elements: call premium, flotation costs, additional interest during overlap period
- Amortization of flotation cost tax shield
- Annual interest savings (the benefit)
- PV of benefits using after-tax cost of debt as discount rate
- Full NPV = PV(benefits) − PV(costs) — should you refund or not?

🎯 Exam tip: This is very step-by-step — follow the process exactly and you'll get full marks.

🔗 Full exam prep resources: checkmarktutorials.com

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Видео Bond Refunding: Full NPV Calculation Step-by-Step канала Prof John K