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Jiminy's Cricket Farm issued a 30-year, 4.5 percent semiannual bond three years ago. The bond currently sells for 104 percent of its face value.
Jiminy's Cricket Farm issued a 30-year, 4.5 percent semiannual bond three years ago. The bond currently sells for 104 percent of its face value. The book value of the debt issue is $75 million. In addition, the company has a second debt issue on the market, a zero coupon bond with eight years left to maturity; the book value of this issue is $30 million, and the bonds sell for 81 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. Input Area: First issue Settlement Maturity Coupon rate Price (% of par) Redemption (% of par) Payments per year Book value of issue Second issue Settlement date Maturity date Annual coupon rate Coupons per year Price (% of par) Redemption (% of par) Book value issue Tax rate B 1/1/2020 1/1/2047 4.50% 104 100 2 $75,000,000 1/1/2020 1/1/2028 096 100 $30,000,000 2296 (Use cells A6 to 822 from the given information to complete this question. You must use the built-in Excel function Leave the "Basis" input blank in the function. You may enter a constant as a hard coded value.)
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