Jiminy's Cricket Farm issued a 30-year, 7.2 percent semiannual bond 6 years ago. The bond currently sells for 87.5 percent of its face value. The book value of this debt issue is $103 million. In addition, the company has a second debt issue, a zero coupon bond with 9 years left to maturity; the book value of this issue is $62 million, and it sells for 59 percent of par. The companys tax rate is 38 percent.

Required

What is the total book value of debt? What is the total market value of debt? What is the aftertax cost of the 7.2 percent coupon bond?

What is the aftertax cost of the zero coupon bond? What is the aftertax cost of debt?