Currently, Warren Industries can sell 15 dash year, $1 comma 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 comma 030 each; Warren will incur flotation costs of $30 per bond. The firm is in the 22% tax bracket.

a. Find the net proceeds from sale of the bond, ^{D{n}} .
b. Show the cash flows from the firm’s point of view over the maturity of the bond.
c. Calculate the before-tax and after tax costs of debt.
d. Use the approximation formula to estimate the before tax and after tax costs of debt
e. Compare and contrast the costs of debt calculated in parts c and d. Which approach do you prefer? Why?

The mccolls have made an offer on a new home. the home is new construction and scheduled to be completed by the end of the year. they provide a purchase deposit--a check in the amount of $40,000--to their agent, suzette. suzette, at the broker's direction, deposits the earnest money in the broker's trust fund account within two business days of receipt of the funds. did suzette follow the proper procedures? a. no, the check should not have been cashed. if a check is used as an earnest money deposit, it is to be held until acceptance of the offer. the seller must also be informed the buyer's check is being held and not negotiated. b. yes, suzette deposited the earnest money in the broker's trust fund account as directed. she also deposited the check within three business days of receipt. unless there were written instructions to hold the check until acceptance of the offer, the check may be cashed. c. no, suzette needed to deposit the earnest money in the broker's trust fund account within two days of receipt, not necessarily two business days. d. both a and c