Jiminy's Cricket Farm issued a 30-year, 6.5 percent semiannual bond 9 years ago. The bond currently sells for 108.5 percent of its face value. The book value of this debt issue is $151 million. In addition, the company has a second debt issue, a zero coupon bond with 13 years left to maturity; the book value of this issue is $97 million, and it sells for 62.4 percent of par. The company’s tax rate is 21 percent. 1) what is the total book value of debt?

2) what is the total market value of debt?

3) what is the after tax cost of the 6.5 percent coupon bond?

4) what is the after tax cost of the zero coupon bond?

5) What is the after tax cost of debt?

Which of the following statements is correct? a major disadvantage of a partnership relative to a corporation is the fact that federal income taxes must be paid by the partners rather than by the firm itself. in a typical partnership, liability for other partners’ misdeeds is limited to the amount of a particular partner’s investment in the business.true in a limited partnership, the limited partners have voting control, while the general partner has operating control over the business, and the limited partners are individually responsible, on a pro rata basis, for the firm’s debts in the event of bankruptcy. partnerships have more difficulty attracting large amounts of capital than corporations because of such factors as unlimited liability, the need to reorganize when a partner dies, and the illiquidity of partnership interests.