1
answer
0
watching
134
views
29 Sep 2019
Bennington Industrial Machines issued 138,000 zero coupon bonds seven years ago. The bonds originally had 30 years to maturity with a yield to maturity of 6.8 percent. Interest rates have recently increased, and the bonds now have a yield to maturity of 8.4 percent.
Required:
What is the price of the bonds?
What is the market value of the company's debt?
What is the market value of the company's debt?
If the company has a $45.3 million market value of equity, what weight should it use for debt when calculating the cost of capital?
| Bennington Industrial Machines issued 138,000 zero coupon bonds seven years ago. The bonds originally had 30 years to maturity with a yield to maturity of 6.8 percent. Interest rates have recently increased, and the bonds now have a yield to maturity of 8.4 percent. |
| Required: |
| What is the price of the bonds?
|
Collen VonLv2
29 Sep 2019
