Question
Book Co. has 1.1 million shares of common equity with a par (book) value of $1.35, retained earnings of $30.8 million, and its shares have
Book Co. has 1.1 million shares of common equity with a par (book) value of $1.35, retained earnings of $30.8 million, and its shares have a market value of $50.92 per share. It also has debt with a par value of $21.6 million that is trading at 104% of par.
a. What is the market value of its equity?
b. What is the market value of its debt?
c. What weights should it use in computing its WACC?
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Business Analysis And Valuation Using Financial Statements Text And Cases
Authors: Krishna G. Palepu, Paul M. Healy, Victor L Bernard
3rd Edition
0324118945, 9780324118940
