What is the total market value of debt

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Reference no: EM13288004

Peyton's Colt Farm issued a 30-year, 7.6 percent semiannual bond 8 years ago. The bond currently sells for 88.5 percent of its face value. The company's tax rate is 34 percent. The book value of the debt issue is $101 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 $60 million, and it sells for 58.0 percent of par.

Requirement 1:

What is the total book value of debt?


Requirement 2:

What is the total market value of debt?


Requirement 3:

What is the aftertax cost of debt?

 

Reference no: EM13288004

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