Bennington industrial machines issued 152000 zero coupon


Bennington Industrial Machines issued 152,000 zero coupon bonds five years ago. The bonds originally had 30 years to maturity with a yield to maturity of 7.2 percent. Interest rates have recently increased, and the bonds now have a yield to maturity of 8.3 percent. Required: What is the price of the bonds? What is the market value of the company's debt? If the company has a $46.7 million market value of equity, what weight should it use for debt when calculating the cost of capital

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Financial Management: Bennington industrial machines issued 152000 zero coupon
Reference No:- TGS02141303

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