Question
3. A CFO is trying to determine her firms capital structure. The firm has the following simplified balance sheet: Balance Sheet: Long-term debt: $5,978,492.00 Shareholder
3.
A CFO is trying to determine her firms capital structure. The firm has the following simplified balance sheet:
| Balance Sheet: | |
|---|---|
| Long-term debt: | $5,978,492.00 |
| Shareholder Equity: | $5,164,932.00 |
An analyst has estimated that the debt trades at 94.00% of book value, while the market to book ratio for the common stock is 1.22. What is the weight in debt for the firm?
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Handbook Of The Fundamentals Of Financial Decision Making
Authors: Leonard C MacLean, William T Ziemba
1st Edition
9814417343, 978-9814417341
