(Cost of debt) Sincere Stationery Corporation needs to raise $750,000 to improve its manufacturing plant. It has decided to issue a $1,000 par value bond with an annual coupon rate of 15 percent and a maturity of 18 years. The investors require a rate of return of 9 percent.

a. Compute the market value of the bonds.

b. What will the net price be if flotation costs are 14 percent of the marketprice?

c. How many bonds will the firm have to issue to receive the neededfunds?

d. What is thefirm's after-tax cost of debt if its average tax rate is 25 percent and its marginal tax rate is 36 percent?

a. What is the market value of thebonds?

$ (Round to the nearestcent.)

b. What will the net price be if flotation costs are 14 percent of the marketprice?

$ (Round to the nearestcent.)

c. How many bonds will the firm have to issue to receive the neededfunds? (Round to the nearest wholenumber.)

d. What is thefirm's after-tax cost of debt if its average tax rate is 25 percent and its marginal tax rate is 36 percent?

% (Round to two decimalplaces.)