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I was able to get book val of debt and tmv of debt, but struggled with aftertax cost. Specifically finding the cost of debt. I
I was able to get book val of debt and tmv of debt, but struggled with aftertax cost. Specifically finding the cost of debt. I am unable to use excel on my tests, so I am looking for help finding it with a financial calc. or just by hand. Thanks!
Jiminy's Cricket Farm issued a bond with 30 years to maturity and a semiannual coupon rate of 4 percent 2 years ago. The bond currently sells for 107 percent of its face value. The company's tax rate is 21 percent. The book value of the debt issue is $60 million. In addition, the company has a second debt issue on the market, a zero coupon bond with 10 years left to maturity; the book value of this issue is $35 million, and the bonds sell for 76 percent of par. What is the company's total book value of debt? $95,000,000$90,250,000$99,750,000$85,500,000 What is the company's total market value of debt? $90,800,000$95,340,000$99,880,000$85,500,000 What is your best estimate of the aftertax cost of debt? 2.65%2.76%2.18%2.78%%Step by Step Solution
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