Flotation costs and the cost of debt Currently, Warren Industries can sell 20-year, $1,000-par-value bonds paying annual interest at a 15% coupon rate

Because current market rates for similar bonds are just under 15%, Warren can sell its bonds for $1,100 each; Warren will incur flotation costs of $30 per bond. The firm is in the 27% tax bracket.

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

b. Calculate the before-tax and after-tax costs of debt

The net proceeds from the sale of the bond, Nd, is $_

(Round to the nearest dollar.)