Question
Dinklage Corp. has 7 million shares of common stock outstanding. The current share price is $79, and the book value per share is $10. The
Dinklage Corp. has 7 million shares of common stock outstanding. The current share price is $79, 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 $120 million, a coupon rate of4 percent, and sells for 92 percent of par. The second issue has a face value of $105 million, a coupon rate of3 percent, and sells for 104 percent of par. The first issue matures in 22 years, the second in 7 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.)
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