Dallas Company has a total value of $65 million. Its debt is in the form of zero-coupon

Question:

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.

Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the...