What is the aftertax cost of debt do not include the


Peyton's Colt Farm issued a 30-year, 7 percent semiannual bond 7 years ago. The bond currently sells for 94 percent of its face value. The company's tax rate is 35 percent. The book value of the debt issue is $90 million. In addition, the company has a second debt issue, a zero coupon bond with 10 years left to maturity; the book value of this issue is $60 million, and it sells for 52.5 percent of par.

What is the total book value of debt? (Do not include the dollar sign ($). Enter your answer in dollars, not millions of dollars (e.g., 1,234,567).)


What is the total market value of debt? (Do not include the dollar sign ($). Enter your answer in dollars, not millions of dollars (e.g., 1,234,567).)


What is the aftertax cost of debt? (Do not include the percent sign (%). Round your answer to 2 decimal places (e.g., 32.16).)

 

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Finance Basics: What is the aftertax cost of debt do not include the
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