(Cost of debt) Sincere Stationery Corporation needs to raise $700,000 to improve its manufacturing plant. It has decided to issue a $1000 par value bond with an annual coupon rate of 15percent and a maturity of 12years. The investors require a rate of return of 13percent.

What is the firm's after-tax cost of debt if its marginal tax rate is percent?

Rework the problem as follows:

If the bond's annual coupon rate is 8%, what is the market value of the bond?

What will the net price be if flotation costs are 12 percent of the market price?

How many bonds will the firm have to issue to receive the needed funds?

What is the firm's after-tax cost of debt if its marginal tax rate is 23 percent?