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Suspect Corp. issued a bond with a maturity of 30 years and a semiannual coupon rate...

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Finance

Suspect Corp. issued a bond with a maturity of 30 years and asemiannual coupon rate of 8 percent 3 years ago. The bond currentlysells for 93 percent of its face value. The book value of the debtissue is $50 million. In addition, the company has a second debtissue on the market, a zero coupon bond with 13 years left tomaturity; the book value of this issue is $50 million and the bondssell for 54 percent of par. The company’s tax rate is 35percent.


What is the company’s total book value of debt? (Do notround intermediate calculations. Enter your answer in dollars, notmillions of dollars, e.g., 1,234,567.)

What is the company’s total market value of debt? (Do notround intermediate calculations. Enter your answer in dollars, notmillions of dollars, e.g., 1,234,567.)

What is your best estimate of the aftertax cost of debt?(Do not round intermediate calculations. Enter your answerin dollars, not millions of dollars, e.g., 1,234,567.)

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