A Firm Issues $200 Million in Straight Bonds at an Original

Multiple Choice

A firm issues $200 million in straight bonds at an original issue discount of 0.75% and a coupon rate of 7%. The firm pays fees of 2.5% on the face value of the bonds. The net amount of funds that the debt issue will provide for the firm is closest to which of the following?

A) $193,500,000
B) $180,375,000
C) $178,257,200
D) $185,000,000