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Liu Industrial Machines issued 146,000 zero coupon bonds seven years ago. The bonds originally had 30 years to maturity with a yield to maturity of
Liu Industrial Machines issued 146,000 zero coupon bonds seven years ago. The bonds originally had 30 years to maturity with a yield to maturity of 7.1 percent. Interest rates have recently increased, and the bonds now have a yield to maturity of 8.2 percent. If the company has a $46.1 million market value of equity, what weight should it use for debt when calculating the cost of capital?
Weight of debt_______?
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