Bennington industrial machines issued 142000 zero coupon, Ask an Expert

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Bennington Industrial Machines issued 142,000 zero coupon bonds seven years ago. The bonds originally had 30 years to maturity with a yield to maturity of 7.2 percent. Interest rates have recently increased, and the bonds now have a yield to maturity of 8.3 percent.

Required:

If the company has a $45.7 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).)

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91615448

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