Your firm is issuing 

​$101101 

million in straight bonds at par with a coupon rate of 

5.5 %5.5% 

and paying total fees of 

3.1 %3.1%. 

What is the net amount of funds that the debt issue will provide for your​ firm?

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Part 1

Total proceeds from the issuance are 

​$enter your response here. 

 ​(Round to the nearest​ dollar.)

To find the net amount of funds that the debt issue will provide for your firm, we need to account for the total fees charged on the bond issuance. Here's the step-by-step process:

### 1. Total proceeds from the issuance:
The firm is issuing bonds worth **$101,101,000** (in millions of dollars, $101.101 million).

### 2. Fees:
The firm is paying fees of **3.1%** on the total bond issuance.

### 3. Calculation of net amount:
The net amount after fees is given by subtracting the fees from the total proceeds:
\[
\text{Net Amount} = \text{Total Proceeds} - (\text{Total Proceeds} \times \text{Fees Percentage})
\]
\[
\text{Net Amount} = 101,101,000 - (101,101,000 \times 0.031)
\]
Now, let's calculate this.

The net amount of funds that the debt issue will provide for your firm is **$97,966,869**.

Would you like more details or have any questions?

Here are 5 related questions:
1. How do bond issuance fees impact the total cost of capital for a firm?
2. What is the purpose of issuing straight bonds versus other types of bonds?
3. How does the coupon rate affect the attractiveness of bonds to investors?
4. What are typical fee percentages for bond issuances, and how do they vary?
5. How can a firm reduce the cost of bond issuance?

**Tip:** Always account for issuance fees when calculating the net proceeds from bonds, as they reduce the actual amount available for the firm.

Your firm is issuing $101,101 million in straight bonds at par with a coupon rate of 5.5% and paying total fees of 3.1%. What is the net amount of funds that the debt issue will provide for your firm?

Calculate the net amount of funds from issuing $101,101 million in straight bonds with a 5.5% coupon rate and 3.1% fees. Learn how to apply percentage calculations and basic algebra to determine the funds your firm will receive after fees.

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