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What are filer capital structure weights on book value basis

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Question - Filer Manufacturing has 11 million shares of equity outstanding. The current share price is £68, 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, has a 7% coupon, and sells for 93 % of par. The second issue has a face value of £55 million, has an 8 % coupon, and sells for 104 % of par. The first issue matures in 21 years, the second in 6 years.

Required -

(i) What are Filer's capital structure weights on a book value basis?

(ii) What are Filer's capital structure weights on a market value basis?

(iii) Which are more relevant, the book or market value weights? Why?

Reference no: EM133099623

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