Shanken corp issued a 30-year 12 percent semiannual bond 8

Reference no: EM13597677

Shanken Corp. issued a 30-year, 12 percent semiannual bond 8 years ago. The bond currently sells for 106 percent of its face value. The company's tax rate is 33 percent. The book value of the debt issue is $19 million. In addition, the company has a second debt issue on the market, a zero coupon bond with eight years left to maturity; the book value of this issue is $76 million and the bonds sell for 76 percent of par.

(a)What is the company's total book value of debt?
Total book value of debt $

(b)Calculate the total market value.
Total market value $

(c)What is your best estimate of the aftertax cost of debt?
Aftertax cost of debt %

Reference no: EM13597677

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