+1-415-670-9189
info@expertsmind.com
Market value weights or book value weights
Course:- Financial Management
Reference No.:- EM131186491




Assignment Help
Expertsmind Rated 4.9 / 5 based on 47215 reviews.
Review Site
Assignment Help >> Financial Management

Filer Manufacturing has 6 million shares of common stock outstanding. The current share price is $72, and the book value per share is $7. The company also has two bond issues outstanding. The first bond issue has a face value $70 million, a coupon of 7 percent, and sells for 97 percent of par. The second issue has a face value of $50 million, a coupon of 8 percent, and sells for 106 percent of par. The first issue matures in 22 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 or Book value weights?




Put your comment
 
Minimize


Ask Question & Get Answers from Experts
Browse some more (Financial Management) Materials
Garner-Wagner is considering investing in a project that requires an investment of $3,000,000. The project will generate a cash inflow of 500,000 per year for the next 5 years
The Nexcell Company sold a $1,000 par value, non callable bond that now has 15 years to maturity and a 5.00% annual coupon that is paid semi annually. The bond currently sells
Summerdahl Resorts' common stock is currently trading at $40.00 per share. The stock is expected to pay a dividend of $1.25 a share at the end of the year (D1 = $1.25), and th
Chuck Ponzi has talked an elderly woman into loaning him ?$10,000 for a new business venture. She? has, however, successfully passed a finance class and requires Chuck to sign
A small business owner visits her bank to ask for a loan. The owner states that she can repay a loan at $1,200 per month for the next three years and then $2,400 per month for
You borrow $100,000 at an interest rate of 12% compounded semi annually on January 1st, 2005. The loan terminates on December 31st, 2008. The loan terms call for interest paym
Fulkerson Manufacturing wishes to maintain a sustainable growth rate of 9.5 percent a year, a debt-equity ratio of .49, and a dividend payout ratio of 28 percent. The ratio of
What is the net asset value of an investment company with $5,000,000 in assets, $840,000 in current liabilities, and 1,100,000 shares outstanding? Round your answer to two dec