Question
A firm's market value of equity is $700,000.The firm's capital structure also consists of bonds with a face value of $200,000,an annual coupon rate of
A firm's market value of equity is $700,000.The firm's capital structure also consists of bonds with a face value of $200,000,an annual coupon rate of 3% p.a.,a current yield of 4% p.a., and a maturity date in five years.
What is the firm's debt ratio,based on market values?
a.0.286
b.0.273
c.0.214
d.0.222
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Multinational Business Finance
Authors: David K. Eiteman, Arthur I. Stonehill, Michael H. Moffett
14th edition
133879879, 978-0133879872
