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Currently, Warren Industries can sell 10 dash year ​, ​$1,000 ​-par-value bonds paying annual interest at...

Currently, Warren Industries can sell 10 dash year ​, ​$1,000 ​-par-value bonds paying annual interest at a 14% coupon rate. Because current market rates for similar bonds are just under 14%, Warren can sell its bonds for ​$980 ​each; Warren will incur flotation costs of ​$20 per bond. The firm is in the 25 ​% 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.

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