Liu industrial machines issued 152000 zero coupon bonds


Liu Industrial Machines issued 152,000 zero coupon bonds five years ago. The bonds originally had 30 years to maturity with a yield to maturity of 7.2 percent. Interest rates have recently increased, and the bonds now have a yield to maturity of 8.3 percent.

If the company has a $46.7 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)

Request for Solution File

Ask an Expert for Answer!!
Financial Management: Liu industrial machines issued 152000 zero coupon bonds
Reference No:- TGS02154199

Expected delivery within 24 Hours