Structure weights on a book value basis

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Filer Manufacturing has 6 million shares of common stock outstanding. The current share price is $78, and the book value per share is $5. The company also has two bond issues outstanding. The first bond issue has a face value $65 million, a coupon of 7 percent, and sells for 98 percent of par. The second issue has a face value of $35 million, a coupon of 8 percent, and sells for 106 percent of par. The first issue matures in 22 years, the second in 5 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
  • Book value weights

Reference no: EM131086406

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