Bennington industrial machines issued 138000 zero coupon, Ask an Expert

Finance

Bennington Industrial Machines issued 138,000 zero coupon bonds seven years ago. The bonds originally had 30 years to maturity with a yield to maturity of 6.8 percent. Interest rates have recently increased, and the bonds now have a yield to maturity of 8.4 percent.

Required:

If the company has a $45.3 million market value of equity, what weight should it use for debt when calculating the cost of capital? (Do not round intermediate calculations. Round your answer to 4 decimal places (e.g., 32.1616).)

Weight of debt

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91621687

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