Question
Jiminy's Cricket Farm issued a 30-year, 7.2 percent semiannual bond 8 years ago. The bond currently sells for 93.5 percent of its face value. The
Jiminy's Cricket Farm issued a 30-year, 7.2 percent semiannual bond 8 years ago. The bond currently sells for 93.5 percent of its face value. The book value of this debt issue is $91 million. In addition, the company has a second debt issue, a zero coupon bond with 11 years left to maturity; the book value of this issue is $61 million, and it sells for 53 percent of par. The companys tax rate is 34 percent.
What is the total book value of debt? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, e.g., 1,234,567.)
What is the total market value of debt? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, e.g., 1,234,567.)
What is the aftertax cost of debt%? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
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