Calculating Costs of Issuing Debt Just Add Water, Inc

question 56

Multiple Choice

Calculating Costs of Issuing Debt Just Add Water, Inc., with the help of its investment bank recently issued $200,000,000 of new debt. The offer price on the debt was $1,000 per bond and the underwriter's spread was 4 percent of the gross proceeds. What amount of capital funding did Just Add Water, Inc., raise through this bond issue?

• A) $1,000
• B) $8,000,000
• C) $192,000,000
• D) $200,000,000

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Definitions:

Personality

The amalgamation of qualities that shapes a person's distinctive individuality.

Rationalization

A defense mechanism where controversial behaviors or feelings are justified and explained in a seemingly rational or logical way to avoid the true explanation.

Defense Mechanism

Psychological strategies unconsciously used by individuals to protect themselves from anxiety and confrontations with unpleasant aspects of reality.

Minority Worker

An employee who belongs to a racial, ethnic, or cultural minority within the broader workforce.