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The cost of debt???Gronseth Drywall? Systems, Inc., is in discussions with its investment bankers regarding the...

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Finance

The cost of debt???Gronseth Drywall? Systems, Inc., is indiscussions with its investment bankers regarding the issuance ofnew bonds. The investment banker has informed the firm thatdifferent maturities will carry different coupon rates and sell atdifferent prices. The firm must choose among several alternatives.In each? case, the bonds will have a ?$1 comma 000 par value andflotation costs will be ?$40 per bond. The company is taxed at 28?%. Use the approximation formula to calculate the ?after-tax costof financing with the following alternative.???(Click on the iconlocated on the? top-right corner of the data table below in orderto copy its contents into a? spreadsheet.) Coupon rate Time tomaturity Premium or discount 8 ?% 10 years negative $ 250 The?after-tax cost of financing using the approximation formula isnothing ?%. ?(Round to two decimal? places.)

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\table[[Number of Canoes Produced and Sold,500,700,850],[Total costs,$82,500,$115,500,$140,250