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What is the company total book value of debt

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Reference no: EM132855822

Question - Jiminy's Cricket Farm issued a 15-year, 4 percent semi-annual coupon bond 2 years ago. The bond currently sells for 91 percent of its face value. The company's tax rate is 21 percent. The book value of the debt issue is $30 million. In addition, the company has a second debt issue, a zero coupon bond with 7 years left to maturity; the book value of this issue is $20 million, and the bonds sell for 73 percent of par.

Required -

a. What is the company's total book value of debt?

b. What is the company's total market value of debt?

c. What is the after tax cost of debt?

Reference no: EM132855822

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