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Jiminy's Cricket Farm issued a 30-year, 7 percent semi-annual bond 9 years ago. The bond currently sells for 94 percent of its face value. The book value of the debt issue is $16 million. The company's tax rate is 33 percent.

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Jarrod Robel
Jarrod RobelLv2
28 Sep 2019

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Jiminy's Cricket Farm issued a 30-year, 7.4 percent semiannual bond 8 years ago. The bond currently sells for 91 percent of its face value. The book value of this debt issue is $96 million. In addition, the company has a second debt issue, a zero coupon bond with 11 years left to maturity; the book value of this issue is $66 million, and it sells for 55.5 percent of par. The company’s tax rate is 34 percent.
Requirement 1:

What is the total book value of debt? (Do not round intermediate calculations. Enter your answer in dollars, not millions of dollars (e.g., 1,234,567).)
Requirement 2:

What is the total market value of debt? (Do not round intermediate calculations. Enter your answer in dollars, not millions of dollars (e.g., 1,234,567).)
Requirement 3:

What is the aftertax cost of debt? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)

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What is the pretax cost of debt?

What is the aftertax cost of debt?

Moldova Beef Farm issued a 25-year, 9 percent semi-annual bond 7 years ago. The bond currently sells for 108 percent of its face value. The company

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