Question
PLL issued a 30-year, 7.00% semi-annual bond 9 years ago. At the moment the bond sells for 89.00% percent of face value. The book value
PLL issued a 30-year, 7.00% semi-annual bond 9 years ago.
At the moment the bond sells for 89.00% percent of face value.
The book value of debt issue is $23M.
FPLLs tax rate is 34.00%
FPLL also has a second debt issue on the market; a zero coupon bond (ZCB)
with 9 years left to maturity; the book value of this issue is $83M and
the bonds sell for 76% of par value.
What is FPLLs total market value of debt?
| A. | $83,550,000 | |
| B. | $81,480,000 | |
| C. | $76,500,000 | |
| D. | $80,950,000 |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Intermediate Accounting
Authors: Loren A Nikolai, D. Bazley and Jefferson P. Jones
10th Edition
978-0324300987
