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Cost of debt using the approximation formula For the following $1,000-par-value bond, assuming annual interest payment and a 29% tax rate, calculate the after-tax cost to maturity using the approximation formula. Life Underwriting fee $25 Discount (-) or premium (+) - $40 Coupon interest rate 7% 15 years The after-tax cost of financing using the approximation formula is %. (Round to two decimal places.) efore-tax cost of debt Gronseth Drywall Systems, Inc., is in discussions with its investment bankers regarding the issuance of new bonds. The investment banker as informed the firm that different maturities will carry different coupon rates and sell at different prices. The firm must choose among several alternatives. each case, the bonds will have a $1,000 par value and flotation costs will be $30 per bond. Calculate the before-tax cost of financing with the following alternative. Click on the icon here e in order to copy the contents of the data table below into a spreadsheet.) Coupon rate 11% Time to maturity 20 years Premium or discount $210 he before-tax cost of debt is %. (Round to two decimal places.)