Problem:

As a financial manager, you need to raise capital for your company. Your bank will not give you the terms needed to initiate a project. You need to raise $10,000,000.00 and don't want to pay more than 6% annual interest (paid bi-annually) so you decide to issue bonds (face value of $1,000 each) that mature in 20 years. Five years later, your company's project has done much better than expected and would like to re-purchase the bonds on the secondary market in an attempt to pay off the debt early. During this time interest rates have fallen from 6% to 4%.

Required:

Question: How much will it cost the company to pay off their debt at this time?

Note: Please provide full description.