3

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 of6 percent, and sells for 96 percent of par. The second issue has a face value of $45 million, a coupon of7 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

c.	Which are more relevant?
	Market value weights Book value weights

1- A Japanese company has a bond outstanding that sells for 91 percent of its 100,000 par value. The bond has a coupon rate of 5.8 percent paid annually and matures in 20 years.

What is the yield to maturity of this bond?(Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Yield to maturity

%

2

The next dividend payment by ECY, Inc., will be $1.76 per share. The dividends are anticipated to maintain a growth rate of 7 percent, forever. The stock currently sells for $34 per share.

What is the dividend yield?(Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Dividend yield

%

What is the expected capital gains yield? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Capital gains yield

%