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 $1,030 each; Warren will incur flotation costs of $35 per bond. The firm is in the 25% tax bracket. a. Find the net proceeds from the sale of the bond, N_(d). b. Calculate the before-tax and after-tax costs of debt