Calculate the firm market value capital structure

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Reference no: EM133062777

Suppose the Schoof Company has this book value balance sheet:

Current assets

$30,000,000

Current liabilities

$20,000,000

 

Notes payable

10,000,000

Fixed assets

70,000,000

Long-term debt

30,000,000

 

Common stock (1 million shares)

1,000,000


Retained earnings

39,000,000

Total assets

$100,000,000

Total liabilities and equity

$100,000,000

The notes payable are to banks, and the interest rate on this debt is 11%, the same as the rate on new bank loans. These bank loans are not used for seasonal financing but instead are part of the company's permanent capital structure. The long-term debt consists of 30,000 bonds, each with a par value of $1,000, an annual coupon interest rate of 7%, and a 15-year maturity. The going rate of interest on new long-term debt, rd, is 11%, and this is the present yield to maturity on the bonds. The common stock sells at a price of $66 per share. Calculate the firm's market value capital structure. Do not round intermediate calculations. Round the monetary values to the nearest dollar and percentage values to two decimal places.

Short-term debt

$ %

Long-term debt

 

Common equity


Total capital

$  %

Reference no: EM133062777

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