Erna corp has 5 million shares of common stock outstanding

Reference no: EM13623076

Erna Corp. has 5 million shares of common stock outstanding. The current share price is $71 and the book value per share is $6. Erna Corp. also has two bond issues outstanding. The first bond issue has a face value of $65 million, has a coupon of 6 percent and sells for 96 percent of par. The second issue has a face value of $45 million, has a coupon of 7 percent and sells for 105 percent of par. The first issue matures in 21 years, the second in 5 years.

a.What are Erna's capital structure weights on a book value basis? (to 4 decimal places)

Equity/Value -?

Debt/Value - ?

b. What are Erna's capital structure weights on a market value basis? ( to 4 decimal places)

Equity/Value - ?

Debt/Value - ?

c.Which are more relevant, the book or the market value weights?

Reference no: EM13623076

Questions Cloud

An average neutron star has approximately the same mass as : an average neutron star has approximately the same mass as the sun but is compressed into a sphere of radius roughly 10

A hoop and a disk both of 038- m radius and 30- kg mass are : a hoop and a disk both of 0.38- m radius and 3.0- kg mass are released from the top of an inclined plane 3.3 m high and

A fully automated production line in a facility involves : a fully automated production line in a facility involves metal blocks being placed in a furnace for heat treatment. two

It is noted that the block-spring system when compressed 50 : a 0.465 kg wood block is firmly attached to a very light horizontal spring k 165 nm . it is noted that the

Erna corp has 5 million shares of common stock outstanding : erna corp. has 5 million shares of common stock outstanding. the current share price is 71 and the book value per share

Find the expected amount of time it will take to get the : a company has a piece of equipment that is broken. the company loses 500 a day for each day the equipment remains

Use eulers method to solve this equation from t 0 to 1 d : the amount of a uniformaly distributed radioactive contaminant contained in a closed reactor is measured by its

You shoot a ball of mass 50g into a pendulum arm of mass : you shoot a ball of mass 50g into a pendulum arm of mass 200g whose center of mass rises 15cm. calculate the initial

Two planets have the same mass each planet has a constant : two planets have the same mass. each planet has a constant density but the density of planet 2 is three times as high

User Account

All Pages