Shanken Corp. issued a 20-year, 5.1 percent semiannual bond 2 years ago. The bond currently sells...

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Shanken Corp. issued a 20-year, 5.1 percent semiannual bond 2years ago. The bond currently sells for 97 percent of its facevalue. The book value of the debt issue is $50 million. Inaddition, the company has a second debt issue on the market, a zerocoupon bond with 15 years left to maturity; the book value of thisissue is $40 million and the bonds sell for 52 percent of par. Thecompany’s tax rate is 25 percent. a. What is the company's totalbook value of debt? (Do not round intermediate calculations andenter your answer in dollars, not millions of dollars, e.g.,1,234,567.) b. What is the company's total market value of debt?(Do not round intermediate calculations and enter your answer indollars, not millions of dollars, e.g., 1,234,567.) c. What is yourbest estimate of the aftertax cost of debt? (Do not roundintermediate calculations and enter your answer as a percentrounded to 2 decimal places, e.g., 32.16.)

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a Total debt BV debt 1 BV debt 2 BV 5040 90 m b MV of Bond1Par valuebonds outstandingage of par MV of Bond1100050000097 48500000 MV of Bond2Par valuebonds See Answer

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Shanken Corp. issued a 20-year, 5.1 percent semiannual bond 2years ago. The bond currently sells for 97 percent of its facevalue. The book value of the debt issue is $50 million. Inaddition, the company has a second debt issue on the market, a zerocoupon bond with 15 years left to maturity; the book value of thisissue is $40 million and the bonds sell for 52 percent of par. Thecompany’s tax rate is 25 percent. a. What is the company's totalbook value of debt? (Do not round intermediate calculations andenter your answer in dollars, not millions of dollars, e.g.,1,234,567.) b. What is the company's total market value of debt?(Do not round intermediate calculations and enter your answer indollars, not millions of dollars, e.g., 1,234,567.) c. What is yourbest estimate of the aftertax cost of debt? (Do not roundintermediate calculations and enter your answer as a percentrounded to 2 decimal places, e.g., 32.16.)