(Cost of debt)Gillian Stationery Corporation needs to raise

$640,000

to improve its manufacturing plant. It has decided to issue a

$1,000

par value bond with an annual coupon rate of

8.3

percent with interest paid semiannually and a

15-year

maturity. Investors require a rate of return of

10.8

percent.

a. Compute the market value of the bonds.

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

c.What is the firm's after-tax cost of debt if the firm's tax rate is

34

percent?