What is the total market value of debt-aftertax cost of debt

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Jiminy's Cricket Farm issued a 30-year, 7.6 percent semi annual bond 6 years ago. The bond currently sells for 92.5 percent of its face value. The book value of this debt issue is $93 million. In addition, the company has a second debt issue, a zero coupon bond with 9 years left to maturity; the book value of this issue is $63 million, and it sells for 54 percent of par. The company’s tax rate is 38 percent. 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: EM13942960

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