Jiminy's Cricket Farm issued a 20-year, 10 percent semiannual bond 2 years ago. The bond currently sells for 93 percent of its face value. 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 13 years left to maturity; the book value of this issue is $40 million and the bonds sell for 52 percent of par. The companys tax rate is 23 percent.

1. What is the companys total book value of debt?

$90,000,000

2. What is the companys total market value of debt?

$67,300,000

3. What is your best estimate of the aftertax cost of debt?

Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.

It is NOT 7.15%