What weight should it use for debt when calculating the


Liu Industrial Machines issued 145,000 zero coupon bonds six years ago. The bonds originally had 30 years to maturity with a yield to maturity of 7 percent. Interest rates have recently increased, and the bonds now have a yield to maturity of 8.1 percent. If the company has a $46 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.)

Weight of debt ____________

Request for Solution File

Ask an Expert for Answer!!
Financial Management: What weight should it use for debt when calculating the
Reference No:- TGS02390658

Expected delivery within 24 Hours