Shanken Corp. issued a 10-year, 6 percent semiannual bond 2 years ago. The bond currently sells for 95 percent of its face value. The book value of the debt issue is $55 million. In addition, the company has a second debt issue on the market, a zero coupon bond with 15 years left to maturity; the book value of this issue is $30 million and the bonds sell for 55 percent of par. The company's tax rate is 40 percent.
- 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?