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A Firm Issues $225 Million in Straight Bonds at an Original

Question 14

Multiple Choice

A firm issues $225 million in straight bonds at an original issue discount of 2.0% and a coupon rate of 6%. The firm pays fees of 4% on the face value of the bonds. The net amount of funds that the debt issue will provide for the firm is ________.


A) $200.925 million
B) $211.5 million
C) $222.075 million
D) $232.65 million

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