Liu industrial machines issued 149000 zero coupon bonds six, Ask an Expert

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Liu Industrial Machines issued 149,000 zero coupon bonds six years ago. The bonds originally had 30 years to maturity with a yield to maturity of 7.4 percent. Interest rates have recently increased, and the bonds now have a yield to maturity of 8.5 percent.

If the company has a $46.4 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.)

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92808363

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