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Dinklage Corp. has 4 million shares of common stock outstanding. The current share price is $70, and the book value per share is $5. The

Dinklage Corp. 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. The first bond issue has a face value of $60 million, a coupon of5 percent, and sells for 95 percent of par. The second issue has a face value of $40 million, a coupon of6 percent, and sells for 104 percent of par. The first issue matures in 20 years, the second in 4 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., 32.1616.)

Equity/Value
Debt/Value

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.)

Equity/Value
Debt/Value

c.

Which are more relevant, the book or market value weights?

Market value

Book value

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