John tye was hired as the new corporate finance analyst at


John Tye was hired as the new corporate finance analyst at I-EII Enterprises and received his first assignment. John is to take the $25 million in cash received from a recent divestiture, to use part of these proceeds to retire an outstanding $10 million bond issue, and to use the remainder to repurchase common stock. However, the bond issue cannot be retired for another two years. If John can place the funds necessary to retire this $10 million debt into an account earning a 6 percent annual return compounded monthly, how much of the $25 million remains to repurchase stock?

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Financial Management: John tye was hired as the new corporate finance analyst at
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