Business, 30.03.2020 17:25 whyidkmyself

Currently, Warren Industries can sell 20 dash year, $1 comma 000-par-value bonds paying annual interest at a 9% coupon rate. Because current market rates for similar bonds are just under 9%, Warren can sell its bonds for $980 each; Warren will incur flotation costs of $20 per bond. The firm is in the 28% tax bracket. a. Find the net proceeds from the sale of the bond, Upper N Subscript d. b. Calculate the bond's yield to maturity (YTM) to estimate the before-tax and after-tax costs of debt. c. Use the approximation formula to estimate the before-tax and after-tax costs of debt.

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