7. Jiminy's CricketFarm issued a 30-year, 7 percent semiannual bond 8 years ago. The bond currently sells
Question:
7.
Jiminy's CricketFarm issued a 30-year, 7 percent semiannual bond 8 years ago. The bond currently sells for 86 percent of its face value. The book value of this debt issue is $106 million. In addition, the company has a second debt issue, a zero coupon bond with 11 years left to maturity; the book value of this issue is $65 million, and it sells for 60.5 percent of par. The companys tax rate is 34 percent. |
Required |
What is the total book value of debt?(Do not round intermediate calculations. Enter your answer in dollars, not millions of dollars (e.g., 1,234,567).) |
Total book value of debt | $ |
What is the total market value of debt?(Do not round intermediate calculations. Enter your answer in dollars, not millions of dollars (e.g., 1,234,567).) |
Total market value | $ |
What is the aftertax cost of the 7 percent coupon bond?(Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimalplaces(e.g., 32.16).) |
Aftertax cost of debt | % |
What is the aftertax cost of the zero coupon bond?(Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimalplaces(e.g., 32.16).) |
Aftertax cost of debt | % |
What is the aftertax cost of debt?(Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimalplaces(e.g., 32.16).) |
Aftertax cost of debt | % |