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Dani Corporation has 7 million shares of common stock outstanding. The current share price is $79 and the book value per share is $6. The

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Dani Corporation has 7 million shares of common stock outstanding. The current share price is $79 and the book value per share is $6. The company also has two bond issues outstanding, both with semiannual coupons. The first bond issue has a face value $70 million, a coupon of 8 percent, and sells for 94 percent of par. The second issue has a face value of $40 million, a coupon of 9 percent, and sells for 107 percent of par. The first issue matures in 23 years, the second in 6 years. 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.) a. Equity/Value a. Debt/Value b. Equity/Value b. Debt/Value c. Which are more relevant? O Market value weights O Book value weights Sunrise, Incorporated, is trying to determine its cost of debt. The firm has a debt issue outstanding with 19 years to maturity that is quoted at 94 percent of face value. The issue makes semiannual payments and has an embedded cost of 8 percent annually. a. What is the company's pretax cost of debt? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. If the tax rate is 25 percent, what is the aftertax cost of debt? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a. Pretax cost of debt b. Aftertax cost of debt % %

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