Peytons Colt Farm issued a 30-year, 7.4 percent semiannual bond 7 years ago. The bond currently sells

Question:

Peyton’s Colt Farm issued a 30-year, 7.4 percent semiannual bond 7 years ago. The bond currently sells for 89.0 percent of its face value. The company’s tax rate is 35 percent. The book value of the debt issue is $100 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 $59 million, and it sells for 57.5 percent of par.

Requirement 1:

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).)

Total book value of debt $ ______________

Requirement 2:

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).)

Total market value $ _______________

Requirement 3:

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

After tax cost of debt % _____________

Cost Of Debt
The cost of debt is the effective interest rate a company pays on its debts. It’s the cost of debt, such as bonds and loans, among others. The cost of debt often refers to before-tax cost of debt, which is the company's cost of debt before taking... Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a...