Gronseth Drywall? Systems, Inc., is in discussions with itsinvestment bankers regarding the issuance of new bonds. Theinvestment banker has informed the firm that different maturitieswill carry different coupon rates and sell at different prices. Thefirm must choose among several alternatives. In each? case, thebonds will have a ?$1000 par value and flotation costs will be ?$35per bond. The company is taxed at 27?%. Use the approximationformula to calculate the ?after-tax cost of financing with thefollowing alternative. Coupon rate 5% Time to Maturity 15 yearsPremium or discount -220 The? after-tax cost of financing using theapproximation formula is _____% ?
