Bennington Industrial Machines issued 136,000 zero coupon bonds 5 years ago. The bonds basically had 30 years to maturity with the yield to maturity of 6.6 percent. Interest rates have recently raised, and the bonds now have a yield to maturity of 8.2 percent.
Required:
If the company has a $45.1 million market value of equity, what weight must it employ for debt when computing the cost of capital?