Calculate Zonks weighted-average cost of capital

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Reference no: EM133638034

The following data pertains to Zonk Corp., a manufacturer of ball bearings (dollar amounts in millions):
Total assets $7,460
Interest-bearing debt $4,334
Average pre-tax borrowing cost 10.5%
Common equity:
Book value $2,950
Market value $13,003
Income tax rate 35%
Market equity beta 1.13

Determine the weight on debt capital that should be used to calculate Zonk's weighted-average cost of capital:

Reference no: EM133638034

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