Question: A firm has long term debt with the face value of 40 million rupees and the maturity of 20 years. The par value of one

A firm has long term debt with the face value of

A firm has long term debt with the face value of 40 million rupees and the maturity of 20 years. The par value of one bond is Rs. 1000. When the bond was Issued then the annual coupon rate was 13.5%. These bonds pay semiannual coupon payments. Currently, the yield to maturity on these kind of the bonds are 7% annually. The market value of equity is 60 million rupees and of preferred stocks is 10 million. What is market weight of the long term debt of this company? (expected time 3 minutes)

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