Bennington industrial machines issued 146000 zero coupon


Bennington Industrial Machines issued 146,000 zero coupon bonds seven years ago. The bonds originally had 30 years to maturity with a yield to maturity of 7.1 percent. Interest rates have recently increased, and the bonds now have a yield to maturity of 8.2 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 $46.1 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

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Electrical Engineering: Bennington industrial machines issued 146000 zero coupon
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