What is Ewha Corp capital structure weight of the equity

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Problem - Ewha Corp has 10 million shares of common stock outstanding. The current share price is $66, and the book value per share is $6. Ewha Corp also has two bond issues outstanding. The ?rst bond issue has a face value of $70 million, has a 6 percent coupon, and sells for 93 percent of par. The second issue has a face value of $55 million, has an 8 percent coupon, and sells for 104 percent of par. The ?rst issue matures in 21 years, the second in 6 years.

Required -

a. What is Ewha Corp's capital structure weight of the equity on a book value basis?

b. What is Ewha Corp's capital structure weight of the equity on a market value basis?

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

Reference no: EM132766242

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