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Jiminy's Cricket Farm issued a 30-year, 6 percent semiannual bond three years ago. The bond currently sells for 93 percent of its face value. The
Jiminy's Cricket Farm issued a 30-year, 6 percent semiannual bond three years ago. The bond currently sells for 93 percent of its face value. The book value of the debt issue is $95 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 $40 million, and the bonds sell for 67 percent of par. The company's tax rate is 22 percent. a. What is the company's total book value of debt? (Enter your answer in dollars, not millions of dollars, e.g. 1,234,567.) millions of dollars, e.g. 1,234,567.) calculations and enter your answer as a percent rounded to 2 decimal places, e.g. b. What is the company's total market value of debt? (Enter your answer in dollars, not c. What is your best estimate of the aftertax cost of debt? (Do not round intermediate 32.16.) a. Total book value b. Total market value c. Cost of debt
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