Jiminy’s Cricket Farm issued a bond with 15 years to maturity and a semiannual coupon rate...

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Jiminy’s Cricket Farm issued a bond with 15 years to maturityand a semiannual coupon rate of 5 percent 3 years ago. The bondcurrently sells for 92 percent of its face value. The company’s taxrate is 22 percent. The book value of the debt issue is $35million. In addition, the company has a second debt issue on themarket, a zero coupon bond with 8 years left to maturity; the bookvalue of this issue is $20 million, and the bonds sell for 65percent of par.
a. What is the company’s total book value of debt? (Enter youranswer in dollars, not millions of dollars, e.g. 1,234,567.)
b. What is the company’s total market value of debt? (Enter youranswer in dollars, not millions of dollars, e.g. 1,234,567.)
c. What is your best estimate of the aftertax cost of debt? (Donot round intermediate calculations and enter your answer as apercent rounded to 2 decimal places, e.g., 32.16.)

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a Book Value firm of debt BV bond 1BV bond 2350000002000000055000000 b MV of Bond 1Par valuebonds outstandingage of par MV of Bond 1100035000092 32200000 MV See Answer

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Jiminy’s Cricket Farm issued a bond with 15 years to maturityand a semiannual coupon rate of 5 percent 3 years ago. The bondcurrently sells for 92 percent of its face value. The company’s taxrate is 22 percent. The book value of the debt issue is $35million. In addition, the company has a second debt issue on themarket, a zero coupon bond with 8 years left to maturity; the bookvalue of this issue is $20 million, and the bonds sell for 65percent of par.a. What is the company’s total book value of debt? (Enter youranswer in dollars, not millions of dollars, e.g. 1,234,567.)b. What is the company’s total market value of debt? (Enter youranswer in dollars, not millions of dollars, e.g. 1,234,567.)c. What is your best estimate of the aftertax cost of debt? (Donot round intermediate calculations and enter your answer as apercent rounded to 2 decimal places, e.g., 32.16.)