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Dinklage Corp. has 5 million shares of common stock outstanding. Dinklage Corp. has 5 million shares of common stock outstanding. The current share price is
Dinklage Corp. has 5 million shares of common stock outstanding.
Dinklage Corp. has 5 million shares of common stock outstanding. The current share price is $71, and the book value per share is $10. The company also has two bond issues outstanding. The first bond issue has a face value of $80 million, a coupon rate of 4 percent, and sells for 96 percent of par. The second issue has a face value of $65 million, a coupon rate of 3 percent, and sells for 108 percent of par. The first issue matures in 20 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.) Answer is complete but not entirely correct. a. Equity/Value 0.2143 0.7857 0.7640 0.2360 Debt/Value b. EquityValue Debt/Value
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