Question
Jiminys Cricket Farm issued a 20-year, 4 percent semiannual coupon bond 6 years ago. The bond currently sells for 95 percent of its face value.
Jiminys Cricket Farm issued a 20-year, 4 percent semiannual coupon bond 6 years ago. The bond currently sells for 95 percent of its face value. The companys tax rate is 25 percent. The book value of the debt issue is $50 million. In addition, the company has a second debt issue, a zero coupon bond with 7 years left to maturity; the book value of this issue is $35 million, and the bonds sell for 74 percent of par. |
a. | What is the companys total book value of debt? (Enter your answer in dollars, not millions of dollars, e.g. 1,234,567.) |
b. | What is the companys total market value of debt? (Enter your answer in dollars, not millions of dollars, e.g. 1,234,567.) |
A. Total Book Value =
B. Total Market Value =
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