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. Calculating Cost of Debt For the firm in Problem 6 , suppose the book value of the debt issue is $ 1 3 5

. Calculating Cost of Debt For the firm in Problem 6, suppose the book
value of the debt issue is $135 million. In addition, the company has a
second debt issue, a zero coupon bond with 12 years left to maturity; the
book value of this issue is $65 million, and it sells for 64.3 percent of par.
What is the total book value of debt? The total market value? What is the
aftertax cost of debt now?

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