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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 zero coupon bonds five years ago. The bonds originally had years to maturity with a yield to maturity of percent. Interest rates have recently decreased, and the bonds now have a yield to maturity of percent. If the company has a market value of equity of $ million, what weight should it use for debt when calculating the cost of capital? Assume semiannual compounding for the bonds.
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