Question
Bennington Industrial Machines issued 155,000 zero coupon bonds four years ago. The bonds originally had 30 years to maturity with a yield to maturity of
Bennington Industrial Machines issued 155,000 zero coupon bonds four years ago. The bonds originally had 30 years to maturity with a yield to maturity of 5.9 percent. Interest rates have recently increased, and the bonds now have a yield to maturity of 6.7 percent. If the company has a $55 million market value of equity, what weight should it use for debt when calculating the cost of capital?
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Essentials Of Corporate Finance
Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan
11th Edition
1265414963, 978-1265414962
