Company capital structure weights on book value basis

Assignment Help Financial Management

Reference no: EM131346508

Filer Manufacturing has 5 million shares of common stock outstanding. The current share price is $71, and the book value per share is $6. The company also has two bond issues outstanding. The first bond issue has a face value $65 million, a coupon of 6 percent, and sells for 96 percent of par. The second issue has a face value of $45 million, a coupon of 7 percent, and sells for 105 percent of par. The first issue matures in 21 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 ?

Reference no: EM131346508

Questions Cloud

Investment bank has the financing outstanding : The Saunders Investment Bank has the following financing outstanding. Debt: 120,000 bonds with a coupon rate of 8 percent and a current price quote of 110.0; the bonds have 20 years to maturity. 290,000 zero coupon bonds with a price quote of 17.5 an..

Production facilities to build new line of sewing kits : Needle and Thread Inc. is considering expanding one of its production facilities to build a new line of sewing kits. The project would require a $9,000,000 capital investment and will be fully depreciated (straight-line) over its 3 year life. They be..

What would be the bonds value : Your firm, Nurse International has identified investments for your hospital in long term, fixed income bonds. Your boss is expecting you to complete a comprehensive, analytical, response to this project. Suppose that two years after the bonds were is..

Initial cost company would be willing to pay for project : Och, Inc., is considering a project that will result in initial aftertax cash savings of $1.85 million at the end of the first year, and these savings will grow at a rate of 3 percent per year indefinitely. What is the maximum initial cost the compan..

Company capital structure weights on book value basis : Filer Manufacturing has 5 million shares of common stock outstanding. The current share price is $71, and the book value per share is $6. The company also has two bond issues outstanding. What are the company's capital structure weights on a book val..

Calculate deci-bells degree of operating leverage : Deci-bell inc. is producing new headphones, but first management wants to determine its degree of operating leverage. Deci-Bell Inc. has a base level of sales of $350,200 units. Sales price per unit is $167.65 and variable cost per unit is $69.09. To..

What is the value of the taxable gifts that tom has made : Tom and Lisa have amassed great wealth and they wish to shift some of that wealth to their children. A valuation expert has indicated that they can take a 20% discount for lack of marketability and minority interests. If Tom and Lisa each gift their ..

Firm consider when it is making capital structure decision : What important factors, in addition to quantitative factors, should a firm consider when it is making a capital structure decision? How do these factors play in the decision? Be sure to support your ideas with examples from your own experience or oth..

What is the taxable gain to be recognized on this sale : In 2005, Joe who is 75 years old, created a 10 year GRAT into which he transferred $1 million of securities. Joe’s basis in the securities is $250,000. At the time Joe transferred the assets into the GRAT, the IRC Sec. 7520 rate was 4.8%. What is th..

User Account

All Pages