Alberta Energy Issues $110 Million in Straight Bonds at Par

Multiple Choice

Alberta Energy issues $110 million in straight bonds at par with a coupon rate of 8%.The firm also pays underwriting fees of 1.5% on the face value of the bonds.What are the net proceeds to Alberta Energy from the bond issue?

A) $99.55 million
B) $110 million
C) $108.35 million
D) $101.2 million
E) $99.68 million