The Landry Corporation needs to raise $1.30 million of debt on a
15-year issue. If it places the bonds privately, the interest rate
will be 11 percent, and $35,000 in out-of-pocket costs will be
incurred. For a public issue, the interest rate will be 10 percent,
and the underwriting spread will be 4 percent. There will be
$150,000 in out-of-pocket costs. Assume interest on the debt is
paid semiannually, and the debt will be outstanding for the full 15
years,...