The company’s total book value of debt is $135,000,000 and the company’s total market value of debt is :$115,150,000.
a. Book value of debts
Book value of debts=Book value of debt issue+Book value of this issue
Book value of debts= $95,000,000 + $40,000,000
Book value of debtsB =$135,000,000
b. Total market value of debt
Total market value of debt=[(.93)($95,000,000) + (.67)($40,000,000)]
Total market value of debt= $88,350,000+$26,800,000
Total market value of debt= $115,150,000
Therefore the company’s total book value of debt is $135,000,000 and the company’s total market value of debt is :$115,150,000.
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