Question: Problem 13-17 Capital Structure (LO3) Binomial Tree Farms financing includes $5 million of bank loans and $6 million book (face) value of 10-year bonds, which

Problem 13-17 Capital Structure (LO3)

Binomial Tree Farms financing includes $5 million of bank loans and $6 million book (face) 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.

A. What debt ratio should Binomial use to calculate its WACC?

**Note: Round your answer to 2 decimal places

Market Debt Ratio = ?

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