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Danl Corporation has 4 million shares of common stock outstanding. The current share price is $70 and the book value per share is $5. The
Danl Corporation has 4 million shares of common stock outstanding. The current share price is $70 and the book value per share is $5. The company also has two bond Issues outstanding. both with semlannual coupons. The first bond Issue has a face value $60 million, a coupon of 5 percent, and sells for 95 percent of par. The second 1s5ue has a face value of $40 million, a coupon of 6 percent, and sells for 104 percent of par. The first lssue matures in 20 years, the second in 4 years. a. What are the company's capltal structure welghts on a book value basis? (Do not round intermedlate calculations and round your answers to 4 decimal places, e.g.. 1616 \). b. What are the company's capltal structure weights on a market value basis? (Do not round intermedlate calculations and round your answers to 4 decimal places, e.g. 1616.) c. Which are more relevant? Market value weights Book value weights
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