Flotation costs and the cost of debt: Currently, Warren Industries can sell 20-year, $1,000-par-value bonds paying annual interest at a 11% coupon rate. Because current market rates for similar bonds are just under 11%, Warren can sell its bonds for $1,040 each; Warren will incur flotation costs of $30 per bond. The firm is in the 29% tax bracket.

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

b.Calculate the before-tax cost of debt.

c. Calculate the after-tax cost of debt