Vedder also has two bond issues outstanding

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Vedder, Inc., has 6.8 million shares of common stock outstanding. The current share price is $61.80, and the book value per share is $4.80. Vedder also has two bond issues outstanding. The first bond issue has a face value of $70.8 million, a coupon rate of 7.3 percent, and sells for 94 percent of par. The second issue has a face value of $35.8 million, a coupon rate of 7.3 percent, and sells for 93 percent of par. The first issue matures in 19 years, the second in 11 years. Required: (a) What are the company’s capital structure weights on a book value basis? (Do not round intermediate calculations. Round your answers to 4 decimal places (e.g., 32.1616).) Book value weight of equity Book value weight of debt (b) What are the company’s capital structure weights on a market value basis? (Do not round intermediate calculations. Round your answers to 4 decimal places (e.g., 32.1616).) Market value weight of equity Market value weight of debt (c) Which are more relevant, the book or market value weights?

Reference no: EM131296515

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