Question: The ABC Company currently has $30,000,000 of 1 8-percent long-term debentures outstanding. These debentures are due in 12 years and can be called at a premium of 5 percent. At present, the company can float a new issue of similar debentures with a coupon rate of 12 percent. After-tax issuing and underwriting expenses will be $400,000, and the corporate tax rate is 40 percent. All interest is paid semi-annually, and you may assume that tax shields from interest payments are available at the time that each interest payment is made. Should refunding take place?