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Can someone plese help me with calculating the aftertax cost of debt? Thank you!!! Jiminy's Cricket Farm issued a 30-year, 6 percent semiannual bond 3
Can someone plese help me with calculating the aftertax cost of debt? Thank you!!!
Jiminy's Cricket Farm issued a 30-year, 6 percent semiannual bond 3 years ago. The bond currently sells for 92 percent of its face value. The company's tax rate is 40 percent. Suppose the book value of the debt issue is $50 million. In addition, the company has a second debt issue on the market, a zero coupon bond with 12 years left to maturity; the book value of this issue is $50 million, and the bonds sell for 54 percent of par. What is the company's total book value of debt? (Enter your answer in dollars, not millions of dollars, i.e. 1, 234,567.) What is the company's total market value of debt? (Enter your answer in dollars, not millions of dollars, i.e. 1, 234,567.) What is your best estimate of the after tax cost of debt? (Round your answer to 2 decimal places, (e.g., 32.16))
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