Flotation costs and the cost of debt Currently, Warren Industries can sell $20-$year, $$1,000-$par$-$value bonds

paying annual interest at a $8\%$ coupon rate. Because current market rates for similar bonds are just under $8\%,$

Warren can sell its bonds for $$980$ each; Warren will incur flotation costs of $$25$ per bond. The firm is in the $29\%$ 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.