Capital structure weights on a market value basis

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Wang Ltd has 10 million ordinary shares outstanding. Its most recent share price is $7. The book value per share is $1.20. The company also has two debenture issues outstanding.  The first issue has a face value of $20 million, a 6% coupon and sells for 90 per cent of its face value. The second issue has a face value of $25 million, a 7% coupon and sells for 88% of its face value. 

i. What are Wang Ltd's capital structure weights on a book value basis?

ii. What are Wang Ltd's capital structure weights on a market value basis?

iii. Which is more relevant, the book value or market value weights? Why?

Reference no: EM131542890

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