Capital structure weights on a book value basis

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Hero Manufacturing has 6 million shares of common stock outstanding. The current share price is $89 and the book value per share is $8. The company also has two bond issues outstanding, both with semiannual coupons. The first bond issue has a face value $85 million and a coupon of 6 percent and sells for 96 percent of par. The second issue has a face value of $60 million and a,coupon of 7 percent and sells for 109 percent par, The first issue matures in 21 years, the second in 9 years.

A. What is the, company's capital structure weights on a book value basis?

B. What are the company"s capital structure weights on a market value basis?

a. Equity/Value

Debt/Value

b. Equity/Value

Debt/Value

Reference no: EM132288980

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