Question
A company has shares worth $30 dollars per share, with 1,000,000 shares outstanding. It also has 10,000 bonds outstanding, which have face values of $1,000
A company has shares worth $30 dollars per share, with 1,000,000 shares outstanding. It also has 10,000 bonds outstanding, which have face values of $1,000 each and a coupon rate of 4%. These bonds are currently trading at par value.
Using the market value approach, what is the weight of debt for this company?
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Financial Accounting an introduction to concepts, methods and uses
Authors: Clyde P. Stickney, Roman L. Weil, Katherine Schipper, Jennifer Francis
13th Edition
978-0538776080, 324651147, 538776080, 9780324651140, 978-0324789003
