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I just can't find the answer of the aftertax cost of debt. Thank you! Jiminy's Cricket Farm issued a 20-year, 7 percent semiannual coupon bond
I just can't find the answer of the aftertax cost of debt. Thank you!
Jiminy's Cricket Farm issued a 20-year, 7 percent semiannual coupon bond 5 years ago. The bond currently sells for 94 percent of its face value. The company's tax rate is 24 percent. The book value of the debt issue is $45 million. In addition, the company has a second debt issue, a zero coupon bond with 10 years left to maturity; the book value of this issue is $30 million, and the bonds sell for 65 percent of par. a. What is the company's total book value of debt? (Enter your answer in dollars, not millions of dollars, e.g. 1,234,567.) b. What is the company's total market value of debt? (Enter your answer in dollars, not millions of dollars, e.g. 1,234,567.) c. What is the aftertax cost of debt? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a. Total book value Total market value $ 61,800,000 Cost of debtStep by Step Solution
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