Shanken Corp. issued a 30-year, 6.2 percent semi-annual bond 7 years ago. The bond currently sells for 108 percent of its face value. The company’s tax rate is 35 percent.
The book value of the debt issue is $70 million. In addition, the company has a second debt issue on the market, a zero coupon bond with 12 years left to maturity; the book value of this issue is $100 million and the bonds sell for 61 percent of par.
What is the company's total book value of debt? (Do not round intermediate calculations. Enter your answer in dollars, not millions of dollars, i.e. 1,234,567.)
What is the company's total market value of debt? (Do not round intermediate calculations. Enter your answer in dollars, not millions of dollars, i.e. 1,234,567.)
What is your best estimate of the after tax cost of debt? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))