Question
Ace Industrial Machines issued 195,000 zero coupon bonds four years ago. The bonds originally had 30 years to maturity with a yield to maturity of
Ace Industrial Machines issued 195,000 zero coupon bonds four years ago. The bonds originally had 30 years to maturity with a yield to maturity of 5.2 percent. Interest rates have recently decreased, and the bonds now have a yield to maturity of 4.9 percent. If the company has a $73 million market value of equity, what weight should it use for debt when calculating the cost of capital?
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Auditing and Assurance services an integrated approach
Authors: Alvin a. arens, Randal j. elder, Mark s. Beasley
15th edition
978-0133125634, 9780133423815, 133125637, 133423816, 978-0133125689
