Question
Bonaime, Inc., has 7.5 million shares of common stock outstanding. The current share price is $62.50, and the book value per share is $5.50. The
Bonaime, Inc., has 7.5 million shares of common stock outstanding. The current share price is $62.50, and the book value per share is $5.50. The company also has two bond issues outstanding. The first bond issue has a face value of $71.5 million, a coupon rate of 7 percent, and sells for 90.5 percent of par. The second issue has a face value of $36.5 million, a coupon rate of 8 percent, and sells for 89.5 percent of par. The first issue matures in 20 years, the second in 12 years. a. What are the companys 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.)
Book value weight of equity 0.2764 | |
Book value weight of debt | |
b. What are the companys 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.)
Market value weight of equity 0.8280 | |
Market value weight of debt 0.172003 | |
c. Which are more relevant, the book or market value weights? Market Value Weights.
I need the book value weight of debt from problem A Thanks.
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