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AA Airlines has 100,000 shares of common stock outstanding. The stock is currently selling for $50 a share. The firm also has 2 bond issues
AA Airlines has 100,000 shares of common stock outstanding. The stock is currently selling for $50 a share. The firm also has 2 bond issues outstanding. Each bond in all issues has a face value of $1,000. The first bond issue has a total face value of $500,000 and pays 8 percent interest annually. This bond is selling at 82.0 percent of face value. The second bond issue consists of 10,000 bonds which are selling for $1,100 each. These bonds pay 12 percent interest annually and mature in 15 years. The tax rate is 20 percent. What is the capital structure weight of the firm's debt
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