Question: Please help with A b and C Homework: HW6 Save Score: 1.6 of 8 pts 4 of 12 (11 complete) Score: 78.27%, 78.27 of 100
Please help with A b and C
Homework: HW6 Save Score: 1.6 of 8 pts 4 of 12 (11 complete) Score: 78.27%, 78.27 of 100 pts 29-2 (similar to) Question Help * Cost of debt using both methods (YTM and the approximation formula) Currently, Warren Industries can sell 15-year, $1,000-par-value bonds paying annual interest at a 9% coupon rate. As a result of current interest rates, the bonds can be sold for $980 each before incurring flotation costs of $20 per bond. The firm is in the 35% tax bracket. a. Find the net proceeds from the sale of the bond, Nd. 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. a. The net proceeds from the sale of the bond, Nd, is S 960. (Round to the nearest dollar.) b. Using the bond's YTM, the before tax cost of debt is 9.46 %. (Round to two decimal places.)
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