Reference no: EM131340212

Jiminy’s Cricket Farm issued a bond with 18 years to maturity and a semiannual coupon rate of 8 percent 3 years ago. The bond currently sells for 92 percent of its face value and has a yield to maturity of 8.98%. The company’s tax rate is 40 percent. The book value of the debt issue is $45 million. In addition, the company has a second debt issue on the market, a zero coupon bond with 12 years left to maturity; the book value of this issue is $35 million, and the bonds sell for 51 percent of par. What is the company’s total book value of debt? (Enter your answer in dollars, not millions of dollars, e.g. 1,234,567.) Total book value $ 90,000,000 incorrect What is the company’s total market value of debt? (Enter your answer in dollars, not millions of dollars, e.g. 1,234,567.) Total market value $ 64,350,000 incorrect What is your best estimate of the aftertax cost of debt? Note: Calculate the yield on the zero-coupon as an APR with semiannual compounding. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Cost of debt 4.85 incorrect %