Cost of debt with

fees.

Dunder-Mifflin, Inc. (DMI) is selling 600,000 bonds to raise money for the publication of new magazines in the coming year. The bonds will pay a coupon rate of

11.4%

with semiannual payments and will mature in 30 years. Its par value is

$100.

DMI hires an investment banker for the sale of the 600,000 bonds. The investment banker charges a fee of

2%

on each bond sold. What is the cost of debt to DMI if the following are the proceeds before thebanker's fees are deducted?

a.$41,556,000

b.$58,920,000

c.$64,200,000

d.$80,814,000

a. What is the cost of debt to DMI if the bond proceeds are

$41,556,000 before the banker's fees are deducted? (Round to two decimal places.)

b.What is the cost of debt to DMI if the bond proceeds are

$58,920,000 before the banker's fees are deducted? (Round to two decimal places.)

c.What is the cost of debt to DMI if the bond proceeds are

$64,200,000 before the banker's fees are deducted? (Round to two decimal places.)

d.What is the cost of debt to DMI if the bond proceeds are

$80,814,000 before the banker's fees are deducted? (Round to two decimal places.)