Jiminy’s Cricket Farm issued a bond with 30 years to maturity and a semi-annual coupon rate of 6 percent 3 years ago. The bond currently sells for 92 percent of its face value and has a yield to maturity of 6.64%. The book value of the debt issue is $50 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 $50 million, the bonds sell for 54 percent of par, and their yield to maturity is 5.20%.
What is the company’s total book value of debt? (Enter your answer in dollars, not millions of dollars, e.g. 1,234,567.) Total book value $ What is the company’s total market value of debt? (Enter your answer in dollars, not millions of dollars, e.g. 1,234,567.)
Total market value $ The company’s marginal tax rate is 40 percent. What is the after-tax cost of debt? Leave the yields as an APR. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Cost of debt %