Question
Dinklage Corp. has 7 million shares of common stock outstanding. The current share price is $73, and the book value per share is $8. The
Dinklage Corp. has 7 million shares of common stock outstanding. The current share price is $73, and the book value per share is $8. The company also has two bond issues outstanding. The first bond issue has a face value of $75 million, a coupon of 8 percent, and sells for 98 percent of par. The second issue has a face value of $55 million, a coupon of 9 percent, and sells for 107 percent of par. The first issue matures in 23 years, the second in 7 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 ________
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