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Jiminy's Cricket Farm issued a 3 0 - year, 7 percent semiannual bond 3 years ago. The bond currently sells for 9 3 percent of

Jiminy's Cricket Farm issued a 30-year, 7 percent semiannual bond 3 years ago. The
bond currently sells for 93 percent of its face value. The book value of the debt issue is
$85 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 $35 million,
and the bonds sell for 59 percent of par. What is the company's total book value of
debt? The total market value? What is your best estimate of the aftertax cost of debt?
The company's tax rate is 22 percent.
First bond issue:
Settlement
Maturity
Coupon rate
Price (% of par)
Redemption value (% of par)
Payments per year
Book value of debt issue
Second bond issue:
Settlement date
01/01/00
Maturity date
Annual coupon rate
Coupons per year
Bond price (% of par)
Redemption value (% of par)
Book value debt issue
Tax rate
Complete the following analysis. Do not hard code values in your calculations.
Leave the "Basis" input blank in the YIELD function. You must use the built-in
Excel function to answer this question.
Book value of debt
Market value of first bond
Market value of debt
Market value weight of first bond
Market value weight of second bond
Pretax cost of first issue
Aftertax cost of first issue
Pretax cost of second issue
Aftertax cost of second issue
Aftertax cost of debtjiminy's cricket farm issued a 30-year, 7 percent semiannual bond 3 years ago. the bond currently sells for 93 percent of its face value. the compnay's tax rate is 22 percent. what is the pretax cost of debt? what is the aftertax cost of debt Please use Excel Formulas
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