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A. Calculate the book value weight (Ignore short-term liabilities); B. Calculate the market price per bond. C. Calculate the market value of preferred stocks;

A. Calculate the book value weight (Ignore short-term liabilities); B. Calculate the market price per bond.  Assets Current Assets Net Fixed Assets 100 Total Assets 400 Balance Sheet (In million dollars) December 31,

A. Calculate the book value weight (Ignore short-term liabilities); B. Calculate the market price per bond. C. Calculate the market value of preferred stocks; D Calculate the market value weight of the firm's capital structure. (Ignore short-term liabilities) A. DETERMINE THIS COMPANY'S BOOK VALUE CAPITAL STRUCTURE B. DETERMINE THIS COMPANY'S MARKET VALUE CAPITAL STRUCTURE C. MARKET PRICE PER PREFERRED STOCK: D. MARKET-VALUE WEIGHT Assets Current Assets Net Fixed Assets 100 Total Assets 400 Balance Sheet (In million dollars) December 31, 2012 Liabilities Accounts Payable Notes Payable Bonds (6%) Preferred Stocks Common Stock ($1 Par) Paid in Capital Retained Earnings Tot Liab. & Equity 20 80 150 50 10 24 166 500 i. Bonds mature in 10 years; the coupon rate is 6%, and the required rate of return is 8%. ii. Preferred stock's expected return is 8% and the required rate of return is 12%. Common Stock: The growth rate is 20% for the first three years, and then 7% onwards. The required rate of return is 17%. The dividend is $2.00 at the beginning of the investment horizon. 500

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