Flotation costs and Currently, warren industhet sell 10-year, 1,000-par-value bonds paying annual interest at a 12% coupon rate. Because current market rates for similar bonds are just under 12%, Warren can sell its bonds for $970 each; Warren will incur flotation costs of $20 per bond. The firm is in the 24% tax bracket. a. Find the net proceeds from the sale of the bond, Nd-
Flotation costs and Currently, warren industhet sell 10-year, 1,000-par-value bonds paying annual interest at a 12% coupon rate. Because current market rates for similar bonds are just under 12%, Warren can sell its bonds for $970 each; Warren will incur flotation costs of $20 per bond. The firm is in the 24% tax bracket. a. Find the net proceeds from the sale of the bond, Nd-
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter11: Determining The Cost Of Capital
Section: Chapter Questions
Problem 2P
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questions 1 and 2 please
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