Reference no: EM131178850
Jiminy’s Cricket Farm issued a 15-year, 6 percent semi annual bond 2 years ago. The bond currently sells for 95 percent of its face value. The company’s tax rate is 40 percent.
Suppose the book value of the debt issue is s60 million. In addition, the company has a second debt issue on the market, a zero coupon bond with 1s 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, i.e. 1,234,567.)
Total book value $
What is the company's total market value of debt? (Enter your answer in dollars, not millions of dollars, I.e. 1,234,567.)
Total market value s
What is your best estimate of the after-tax cost of debt? (Round your answer to 2 deeimal places. (e.g., 32.16))
Cost of debt
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: Jiminy’s Cricket Farm issued a 15-year, 6 percent semi annual bond 2 years ago. The bond currently sells for 95 percent of its face value. The company’s tax rate is 40 percent. What is the company's total book value of debt? What is your best estimat..
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