The only bond issue that Roberts Co. has outstanding are zero coupon bonds maturing in 15 years. The yield to maturity of these bonds is 12%. Each zero has a face value of $1,000 and there are 2,000 of the bonds outstanding. If the market value of Roberts’ equity is $1,200,000, what capital structure weight for debt would you use in calculating the WACC for Roberts Co.? Multiple Choice 23.34% 15.55% 10.84% 18.98% 25.65%
The only bond issue that Roberts Co. has outstanding are zero coupon bonds maturing in 15 years. The yield to maturity of these bonds is 12%. Each zero has a face value of $1,000 and there are 2,000 of the bonds outstanding. If the market value of Roberts’ equity is $1,200,000, what capital structure weight for debt would you use in calculating the WACC for Roberts Co.? Multiple Choice 23.34% 15.55% 10.84% 18.98% 25.65%
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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The only bond issue that Roberts Co. has outstanding are zero coupon bonds maturing in 15 years. The yield to maturity of these bonds is 12%. Each zero has a face value of $1,000 and there are 2,000 of the bonds outstanding. If the market value of Roberts’ equity is $1,200,000, what capital structure weight for debt would you use in calculating the WACC for Roberts Co.?
Multiple Choice
23.34%
15.55%
10.84%
18.98%
25.65%
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