Capital structure weights on market value basis

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Filer Manufacturing has 7 million shares of common stock outstanding. The current share price is $79, and the book value per share is $6. Filer Manufacturing also has two bond issues outstanding. The first bond issue has a face value of $70 million and a coupon rate of 8 percent and sells for 94 percent of par. The second issue has a face value of $40 million and a coupon rate of 9 percent and sells for 107 percent of par. The first issue matures in 23 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. 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. Round your answers to 4 decimal places (e.g., 32.1616).) Equity/Value Debt/Value c. Which are more relevant, the book or market value weights? Market value Book value.

Reference no: EM131861993

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