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Corn Farm issued a bond with 25 years to maturity and a semiannual coupon rate of...

Corn Farm issued a bond with 25 years to maturity and a semiannual coupon rate of 4 percent 5 years ago. The bond currently sells for 104 percent of its face value. The company’s tax rate is 24 percent. The book value of the debt issue is $50 million. In addition, the company has a second debt issue on the market, a zero coupon bond with 7 years left to maturity; the book value of this issue is $35 million, and the bonds sell for 79 percent of par.

      

What is the company's total book value of debt?
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Answer #1

Total book value of debt = $85,000,000 [ 50000000+35000000 ]

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