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Re Pearce's Cricket Farm issued a 25-year, 6% semiannual bond 2 years ago. The bond currently sells for 92% of its face value. The company's

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Re Pearce's Cricket Farm issued a 25-year, 6% semiannual bond 2 years ago. The bond currently sells for 92% of its face value. The company's tax rate is 40% Suppose the book value of the debt issue is $45 million. In addition, the company has a second debt issue on the market, a zero coupon bond with 12 years left to maturity, the book value of this issue is $45 million and the bonds sell for 53% of par. Assume the par value of the bond is $1,000

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