What is the company total market value of debt

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Shanken Corp. issued a bond with a maturity of 20 years and a semiannual coupon rate of 10 percent 4 years ago. The bond currently sells for 97 percent of its face value. The book value of the debt issue is $40 million. In addition, the company has a second debt issue on the market, a zero coupon bond with 11 years left to maturity; the book value of this issue is $40 million and the bonds sell for 52 percent of par. The company’s tax rate is 38 percent.

What is the company’s total book value of debt?

What is the company’s total market value of debt?

What is your best estimate of the aftertax cost of debt?

Reference no: EM131991208

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