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Pearce's Cricket Farm issued a 1 5 - year, 8 % semiannual bond 3 years ago. The bond currently sells for 9 6 % of
Pearce's Cricket Farm issued a year, semiannual bond years ago. The bond currently sells for of its face value. The company's tax rate is
Suppose the book value of the debt issue is $ million. In addition, the company has a second debt issue on the market, a zero coupon bond with years left to maturity; the book value of this issue is $ million and the bonds sell for of par. Assume the par value of the bond is $
What is the company's total book value of debt? Enter the answer in dollars. Omit $ sign in your response.
Total book value $
What is the company's total market value of debt? Enter the answer in dollars. Omit $ sign in your response.
Total market value $
What is your best estimate of the aftertax cost of debt? Do not round intermediate calculations. Enter your answer as a percentage rounded to decimal places.
Cost of debt
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