Computing the debt-assets ratio


Dallas Company has a total value of $65 million. Its debt is in the form of zero-coupon bonds, which will mature in 9 years. The face value of bonds is $15 million. The riskless rate is 3.5% at present. The σ of Dallas is 0.35. Find the debt/assets ratio of Dallas.

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Finance Basics: Computing the debt-assets ratio
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