Question
Dinklage Corp. has 5 million shares of common stock outstanding. The current share price is $84, and the book value per share is $7. The
Dinklage Corp. has 5 million shares of common stock outstanding. The current share price is $84, and the book value per share is $7. The company also has two bond issues outstanding. The first bond issue has a face value of $60 million, a coupon of 7 percent, and sells for 94 percent of par. The second issue has a face value of $35 million, a coupon of 8 percent, and sells for 107 percent of par. The first issue matures in 22 years, the second in 4 years. |
a. | What are the company's capital structure weights on a book value basis?
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