1. Cost of debt with fees. Kenny Enterprises will issue a bond with a par value of ?$1,000?, a maturity of twenty? years, and a coupon rate of 12.3?% with semiannual? payments, and will use an investment bank that charges ?$30 per bond for its services. What is the cost of debt for Kenny Enterprises at the following market? prices?

a. ?$935.65

b. ?$1,006.13

c. ?$1,075.21

d. ?$1,173.73

2. Last year, Towne Inc. had sales of $400,000, with cost of goods $112,000. The firm’s operating expenses were $130,000 and its increase in retained earnings was $58,000. There are currently 22,000 common stock shares outstanding and the firm pays a $1.60 dividend per share?

a. Compare the firm’s operating profit margin?

b. What was the times interest earned?