Jiminy's Cricket Farm issued a 30-year, 7 percent semi-annual bond 5 years ago. The bond currently sells for 81 percent of its face value. The book value of the debt issue is $23 million. The company's tax rate is 33 percent. In addition, the company has a second debt issue on the market, a zero coupon bond with 5 years left to maturity; the book value of this issue is $78 million and the bonds sell for 74 percent of par.
Required:
a) What is the company's total book value of debt?
b) company's total market value of debt?
c) your best estimate of after tax cost of debt?