Company capital structure weights on book value

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Reference no: EM131952963

Filer Manufacturing has 7 million shares of common stock outstanding. The current share price is $86, and the book value per share is $5. The company also has two bond issues outstanding. The first bond issue has a face value $70 million, a coupon of 9 percent, and sells for 96 percent of par. The second issue has a face value of $45 million, a coupon of 10 percent, and sells for 104 percent of par. The first issue matures in 24 years, the second in 6 years.

a. What are the company's capital structure weights on a book value basis? (Do not round intermediate calculations and round your answers to 4 decimal places, e.g., 32.1616.)

Equity / Value

Debt / Value

b. What are the company's capital structure weights on a market value basis? (Do not round intermediate calculations and round your answers to 4 decimal places, e.g., 32.1616.)

Equity / Value

Debt / Value

c. Which are more relevant?

Market value weights

Book value weights

Reference no: EM131952963

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