Question
1. Find the amount of long-term debt (D): Publicly traded companies are required to produce annual accounting reports (10K) for the SEC detailing the financial
1. Find the amount of long-term debt (D): Publicly traded companies are required to produce annual accounting reports (10K) for the SEC detailing the financial operations of the past year. On the balance sheet, each company is required to list the value of long-term debt. (Note: Most of the tables in this report are created by accountants. Hence, this report provides book values. But, the book value of debt and the market value of debt are roughly equal.) These can be found on the SEC EDGAR webpage www.sec.gov/edgar.shtml. For Kimberly Clarks 10-K https://www.sec.gov/Archives/edgar/data/55785/000005578518000014/kmb_2017xformx10k.htm
Debt = X
2. Find the amount of equity (E):
What is the book value of equity? This can be found in the annual 10K report.
Book Value of Equity = X
What is the market value of equity? This can be found on finance.yahoo.com. NOTE: Book equity and market equity are different!
Market Value of Equity = X
3. Use the answers to questions 1 and 2 to determine the market capital structure weights.
Weight of Debt = X
Weight of Equity = X
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