Jiminyrsquos cricket farm issued a bond with 25 years to


Jiminy’s Cricket Farm issued a bond with 25 years to maturity and a semiannual coupon rate of 10 percent 4 years ago. The bond currently sells for 97 percent of its face value. The company’s tax rate is 38 percent. The book value of the debt issue is $45 million. In addition, the company has a second debt issue on the market, a zero coupon bond with 11 years left to maturity; the book value of this issue is $45 million, and the bonds sell for 53 percent of par. What is the company’s total book value of debt? What is the company’s total market value of debt? What is your best estimate of the aftertax cost of debt?

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Financial Management: Jiminyrsquos cricket farm issued a bond with 25 years to
Reference No:- TGS02137906

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