Jiminys cricket farm issued a 30-year 8 percent semi-annual, Ask an Expert

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Jiminy's Cricket Farm issued a 30-year, 8 percent semi-annual bond 3 years ago. The bond currently sells for 86 percent of its face value. The book value of the debt issue is $17 million. The company's tax rate is 33%.

In addiition, the company has a second debt issue on the market, a zero couponbond with 3 years left to maturity; the book value of this issue is $82 million and the bonds sell for 80 percent of par.

Required:

(a) What is the company's total book value of debt?

(b) What is the company's total market value of debt?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92418872

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