Cost of debt using both methods Currently, Warren Industries can sell 15-year,

$1,000-par-value bonds paying annual interest at a 12% coupon rate. As a result

of current interest rates, the bonds can be sold for $1,010 each; flotation costs of

$30 per bond will be incurred in this process. The firm is in the 40% tax bracket.

a. Find the net proceeds from sale of the bond, Nd.

b. Show the cash flows from the firm