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What weight should it use for debt

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Question - Ace Industrial Machines issued 130,000 zero coupon bonds 4 years ago. The bonds originally had 30 years to maturity with a yield to maturity of 6.1 percent. Interest rates have recently decreased, and the bonds now have a yield to maturity of 5.2 percent. The bonds have a par value of $2,000. If the company has a $78.6 million market value of equity, what weight should it use for debt when calculating the cost of capital?

Reference no: EM133055741

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