Currently, Warren Industries can sell 10 dash year , $1,000 -par-value bonds paying annual interest at a 14% coupon rate. Because current market rates for similar bonds are just under 14%, Warren can sell its bonds for $980 each; Warren will incur flotation costs of $20 per bond. The firm is in the 25 % tax bracket.

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

b.Calculate the bond's yield to maturity (YTM) to estimate the before-tax and after-tax costs of debt.

c.Use the approximation formula to estimate the before-tax and after-tax costs of debt.