Bennington Industrial Machines issued 137,000 zero coupon bonds six years ago. The bonds originally had 30 years to maturity with a yield to maturity of 6.7 percent. Interest rates have recently increased, and the bonds now have a yield to maturity of 8.3 percent.
Required:
What is the price of the bonds? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)
Bond price $ ________
What is the market value of the company's debt? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16). Enter your answer in dollars, not millions of dollars (e.g., 1,234,567).)
Market value $__________
If the company has a $45.2 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 _________