Question
A CFO is trying to determine her firms capital structure. The firm has the following simplified balance sheet: Balance Sheet: Long-term debt: $5,385,600.00 Shareholder Equity:
A CFO is trying to determine her firms capital structure. The firm has the following simplified balance sheet:
| Balance Sheet: | |
|---|---|
| Long-term debt: | $5,385,600.00 |
| Shareholder Equity: | $5,322,262.00 |
An analyst has estimated that the debt trades at 101.00% of book value, while the market to book ratio for the common stock is 1.26. What is the weight in debt for the firm?
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Public Finance A Contemporary Application Of Theory To Policy
Authors: David N. Hyman
5th Edition
0030113172, 978-0030113178
