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Dani Corporation has 6 million shares of common stock outstanding. The current price is $84, and the book value per share is $5. The company
Dani Corporation has 6 million shares of common stock outstanding. The current price is $84, and the book value per share is $5. The company also has two bond i outstanding. The first bond issue has a face value of $145 million, a coupon ratt percent, and sells for 95 percent of par. The second issue has a face value of million, a coupon rate of 4 percent, and sells for 107 percent of par. The first matures in 24 years, the second in 9 years. Both bonds make semiannual cc million, a coupon rate of 4 percent, and sells for 107 percent of par. The first matures in 24 years, the second in 9 years. Both bonds make semiannual cc payments. a. What are the company's capital structure weights on a book value basis? (D round intermediate calculations and round your answers to 4 decimal places .1616.) b. What are the company's capital structure weights on a market value basis? (Do ne round intermediate calculations and round your answers to 4 decimal places, 16161 Problem 14-12 Book Value versus Market Value [LO3] Dani Corporation has 6 million shares of common stock outstanding. The current share price is $84, and the book value per share is $5. The company also has two bond issues outstanding. The first bond issue has a face value of $145 million, a coupon rate of 5 percent, and sells for 95 percent of par. The second issue has a face value of \$130 million, a coupon rate of 4 percent; and sells for 107 percent of par. The first issue matures in 24 years, the second in 9 years. Both bonds make semiannual coupon payments. a. What are the company's capital structure weights on a book value basis? (Do not round intermediate calculations and round your answers to 4 decimal places, e.g., .1616.) b. What are the company's capital structure weights on a market value basis? (Do not round intermediate calculations and round your answers to 4 decimal places, e.g., .1616.) c. Which are more relevant, the book or market value weights? Market value Book value
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