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Business, 11.12.2019 19:31 goldengirl4078

Cost of debt using both methods (ytm and the approximation formula) currently, warren industries can sell 20 dash year, $1 comma 000-par-value bonds paying annual interest at a 8% coupon rate. because current market rates for similar bonds are just under 8%, warren can sell its bonds for $950 each; warren will incur flotation costs of $30 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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Cost of debt using both methods (ytm and the approximation formula) currently, warren industries can...
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