Ace Industrial Machines issued 105,000 zero coupon bonds 5 years ago. The bonds originally had 30 years to maturity with a yield to maturity of 5.9 percent. Interest rates have recently decreased, and the bonds now have a yield to maturity of 5 percent. The bonds have a par value of $2,000. If the company has a $74.6 million market value of equity, what weight should it use for debt when calculating the cost of capital?

Ace Industrial Machines issued 105,000 zero coupon bonds 5 years ago. The bonds originally had 30 years to maturity with a yield to maturity of 5.9 percent. Interest rates have recently decreased, and the bonds now have a yield to maturity of 5 percent. The bonds have a par value of $2,000. If the company has a $74.6 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., .1616.) Weight of debt