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Calculating Capital Structure Weights Occam Industrial Machines issued 2 2 5 , 0 0 0 zero coupon bonds five years ago. The bonds originally had

Calculating Capital Structure Weights Occam Industrial Machines issued 225,000 zero coupon bonds five 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 4.6 percent. If the company has a market value of equity of $120 million, what weight should it use for debt when calculating the cost of capital? Assume semiannual compounding for the bonds.

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