Peyton%u2019s Colt Farm issued a 30-year, 7.2 percent semiannual bond 6 years ag
ID: 2702117 • Letter: P
Question
Peyton%u2019s Colt Farm issued a 30-year, 7.2 percent semiannual bond 6 years ago. The bond currently sells for 87.5 percent of its face value. The company%u2019s tax rate is 38 percent. The book value of the debt issue is $103 million. In addition, the company has a second debt issue, a zero coupon bond with 9 years left to maturity; the book value of this issue is $62 million, and it sells for 59.0 percent of par.
What is the total book value of debt? (Do not include the dollar sign ($). 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).)
Peyton%u2019s Colt Farm issued a 30-year, 7.2 percent semiannual bond 6 years ago. The bond currently sells for 87.5 percent of its face value. The company%u2019s tax rate is 38 percent. The book value of the debt issue is $103 million. In addition, the company has a second debt issue, a zero coupon bond with 9 years left to maturity; the book value of this issue is $62 million, and it sells for 59.0 percent of par.