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A firm has two classes of securities: long-term bonds and common stock. The bonds have 17 years to maturity, a coupon rate of 10%, semi-annual
A firm has two classes of securities: long-term bonds and common stock. The bonds have 17 years to maturity, a coupon rate of 10%, semi-annual coupon payments, a yield-to-maturity of 6.0%, and $370 million of total par value. The stock has 44 million shares outstanding and a current market price of $39. When computing the WACC, what weight should the firm assign to its cost of equity? Enter your answer as a decimal and show two decimal places.
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