Question: Capital Structure . Binomial Tree Farms financing includes $5 million of bank loans and $6 million book value of 10-year bonds, which are selling at

Capital Structure. Binomial Tree Farms financing includes $5 million of bank loans and $6 million book value of 10-year bonds, which are selling at 95% of par value. Its common equity is shown in Binomials Annual Report at $6.67. It has 500,000 shares of common stock outstanding which trade on the Wichita Stock Exchange at $18 per share. What debt ratio should Binomial use to calculate its WACC?

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