The net proceeds from the sale of a bond. Introduction: The net proceeds from the sale of a bond are defined as the funds that a firm receives from the sale of a bond. Bonds are either sold at discount, at par or at premium. The net proceeds from the sale of a bond is the difference between the total proceeds and the underwriting charges and brokerage fees. Floatation cost refers to the total cost of issuing and selling of securities. Floatation cost includes two components the underwriting charges and brokerage fees. The floatation costs reduce the total proceeds received by the firm as they are paid from the bond funds. The floatation cost is the difference between the total proceeds and net proceeds.

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Chapter 9, Problem 9.1WUE

Summary Introduction

To discuss:

The net proceeds from the sale of a bond.

Introduction:

The net proceeds from the sale of a bond are defined as the funds that a firm receives from the sale of a bond. Bonds are either sold at discount, at par or at premium. The net proceeds from the sale of a bond is the difference between the total proceeds and the underwriting charges and brokerage fees. Floatation cost refers to the total cost of issuing and selling of securities. Floatation cost includes two components the underwriting charges and brokerage fees. The floatation costs reduce the total proceeds received by the firm as they are paid from the bond funds. The floatation cost is the difference between the total proceeds and net proceeds.

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