Dunder-mifflin inc dmi is selling 600000 bonds to raise, Ask an Expert

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Dunder-Mifflin, Inc. (DMI) is selling 600,000 bonds to raise money for the publication of new magazines in the coming year. The bonds will pay a coupon rate of 10.4% with semiannual payments and will mature in 30 years. Its par value is $100. DMI hires an investment banker for the sale of the 600,000 bonds. The investment banker charges a fee of 33% on each bond sold. What is the cost of debt to DMI if the following are the proceeds before the banker's fees are deducted?

a. $47,682,000

b. $50,310,000

c. $73,998,000

d. $83,622,000

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92767255

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