1. Dinklage Corporation has 12.1 million shares of common stock outstanding. The current share price is $56, and the book value per share is $3. The company also has two bond issues outstanding. The first bond issue has a face value of $108 million, has a 9 percent coupon, and sells for 95 percent of par. The second issue has a face value of $78.65 million, has a 9 percent coupon, and sells for 98.3 percent of par. The first issue matures in 10 years, the second in 7 years.

What is the company's capital structure weight of equity on a book value basis?

• 0.1547
• 0.1628
• 0.1677
• 0.1693
• 0.1710

What is the company's capital structure weight of debt on a book value basis?

• 0.7953
• 0.8372
• 0.8623
• 0.8707
• 0.8790

What is the company's capital structure weight of equity on a market value basis?

• 0.7507
• 0.7902
• 0.8139
• 0.8218
• 0.8297

What is the company's capital structure weight of debt on a market value basis?

• 0.1993
• 0.2098
• 0.2161
• 0.2182
• 0.2203

2. Viserion, Incorporated, is trying to determine its cost of debt. The firm has a debt issue outstanding with 15 years to maturity that is quoted at 106 percent of face value. The issue makes semiannual payments and has an embedded cost of 7 percent annually.

What is the company's pretax cost of debt?

multiple choice 1

• 6.37%

• 7.65%

• 4.84%

• 7.01%

• 5.74%

If the tax rate is 24 percent, what is the aftertax cost of debt?

multiple choice 2

• 4.84%

• 4.36%

• 5.33%

• 6.78%

• 6.37%