Liu industrial machines issued 136000 zero coupon bonds, Ask an Expert

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Liu Industrial Machines issued 136,000 zero coupon bonds five years ago. The bonds originally had 30 years to maturity with a yield to maturity of 6.6 percent. Interest rates have recently increased, and the bonds now have a yield to maturity of 8.2 percent.

If the company has a $45.1 million market value of equity, what weight should it use for debt when calculating the cost of capital? (Do not round intermediate calculations and 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.:- M92370872

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