Cost of debt with fees. Dunder-Mifflin Inc. (DMI) is selling 600,000 bonds to raise money for new magazines to be published in the coming year. The bonds will pay a coupon rate of 11.7% on semiannual payments. The par value of the bond is $100, and the bond will mature in thirty years. DMI hires an investment banker for the sale of the 600,000 bonds. The investment banker charges a fee of 2% on each bond sold. What is the cost of debt to DMI after the investment banker’s fee if the bonds proceeds are the following?

a.$49,614,000

b.$52,722,000

c.$67,590,000

d.$78,438,000

(Note: These amounts are before investment banker’s fees)

1. What is the cost of debt to DMI after the investment banker’s fee if the bond proceeds are $49,614,000? ___ % (Round to two decimal places)

2. What is the cost of debt to DMI after the investment banker’s fee if the bond proceeds are $52,722,000? ___ % (Round to two decimal places)

3. What is the cost of debt to DMI after the investment banker’s fee if the bond proceeds are $67,590,000? ___ % (Round to two decimal places)

4. What is the cost of debt to DMI after the investment banker’s fee if the bond proceeds are $78,438,000? ___ % (Round to two decimal places)