Reference no: EM132386288

Market Value Capital Structure

Suppose the Schoof Company has this book value balance sheet:

Current assets $30,000,000 Current liabilities $10,000,000

Notes payable 10,000,000

Fixed assets 50,000,000 Long-term debt 20,000,000

Common stock

(1 million shares) 1,000,000

Retained earnings 39,000,000

Total assets $80,000,000 Total claims $80,000,000

The current liabilities consist entirely of notes payable to banks, and the interest rate on this debt is 8%, 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 8%, and a 25-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 $54 per share. Calculate the firm's market value capital structure. Round your answers to two decimal places.

Short-term debt $____ %____

Long-term debt $____ %____

Common equity $____ %____

Total capital $____ %____