Question
ABC issued 190,000 zero coupon bonds 7 years ago. The bonds originally had 30 years to maturity with a yield to maturity of 6.6 percent.
ABC issued 190,000 zero coupon bonds 7 years ago. The bonds originally had 30 years to maturity with a yield to maturity of 6.6 percent. Interest rates have recently decreased, and the bonds now have a yield to maturity of 5.7 percent. The bonds have a par value of $2,000 and semiannual compounding. If the company has a $88.2 million market value of equity, what weight should it use for debt when calculating the cost of capital?
answer in 4 decimal places
Weight of debt = ?
ABC issued 190,000 zero coupon bonds 7 years ago. The bonds originally had 30 years to maturity with a yield to maturity of 6.6 percent. Interest rates have recently decreased, and the bonds now have a yield to maturity of 5.7 percent. The bonds have a par value of $2,000 and semiannual compounding. If the company has a $88.2 million market value of equity, what weight should it use for debt when calculating the cost of capital?
answer in 4 decimal places
Weight of debt = ?
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Principles Of Finance With Excel
Authors: Simon Benninga, Tal Mofkadi
3rd Edition
0190296380, 9780190296384
