What is the company total book value of debt

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Pearce's Cricket Farm issued a 15-year, 6% semiannual bond 2 years ago. The bond currently sells for 95% of its face value. The company's tax rate is 40%.

Suppose the book value of the debt issue is $60 million. In addition, the company has a second debt issue on the market, a zero coupon bond with 15 years left to maturity; the book value of this issue is $35 million and the bonds sell for 51% of par. Assume the par value of the bond is $1,000.

What is the company's total book value of debt? (Enter the answer in dollars. Omit $ sign in your response.)

Total book value $ 

What is the company's total market value of debt? (Enter the answer in dollars. Omit $ sign in your response.)

Total market value $ 

What is your best estimate of the after-tax cost of debt? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places.)

Cost of debt %

Reference no: EM132412334

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