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What debt ratio should Binomial use to calculate its WACC

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Question - Binomial Tree Farm's financing includes $7.00 million of bank loans and $8.00 million book (face) value of 10-year bonds, which are selling at 90% of par value. Its common equity is shown in Binomial's Annual Report at $8.67. It has 700,000 shares of common stock outstanding which trade on the Wichita Stock Exchange at $36 per share. What debt ratio should Binomial use to calculate its WACC? What is the market Debt ratio?

Reference no: EM133034265

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