Question: Cost of debt using both methods (YTM and the approximation formula) Currently, Warren Industries can sell 15 -year, 51,000 -par-value bonds paying annual interest at

Cost of debt using both methods (YTM and the approximation formula) Currently, Warren Industries can sell 15 -year, 51,000 -par-value bonds paying annual interest at a 14% coupon rate. Because current market rates for similar bends are just under 14%, Warren can sell its bonds for $1, 080 each, Warren will incur flotation costs of 535 per bond The firm is in the 21% tax bracket. a. Find the net proceeds from the sale of the bond, Nd b. Calculate the bond's yeld fo maturity (YTM) to estimate the before-tax and after-tax costs of debt. c. Use the approximation formula to estimate the before-tax and afer-tax costs of debt. a. The not proceeds trom the sale of the bond, Nd is ? (Round to the nearest dollar) b. Using the bond's YTM, the before-tax cost of debt is ih. (Round to two decimal places)

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