Bennington industrial machines issued 136000 zero coupon, Ask an Expert

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Bennington Industrial Machines issued 136,000 zero coupon bonds 5 years ago. The bonds basically had 30 years to maturity with the yield to maturity of 6.6 percent. Interest rates have recently raised, and the bonds now have a yield to maturity of 8.2 percent.

Required:

If the company has a $45.1 million market value of equity, what weight must it employ for debt when computing the cost of capital?

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M91145617

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