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DeVille Industrial Machines issued 151,000 zero coupon bonds four years ago. The bonds originally had 30 years to maturity with a 7.1 percent yield to maturity. Interest rates have recently increased, and the bonds now have an 8.2 percent yield to maturity. If the company has a $46.6 million market value of equity, what weight should it use for debt when calculating the cost of capital?

Financial Management, Finance

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