Question
Dinklage Corp. has 7 million shares of common stock outstanding. The current share price is $86, and the book value per share is $5. The
Dinklage Corp. has 7 million shares of common stock outstanding. The current share price is $86, 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 $70 million, a coupon of 9 percent, and sells for 96 percent of par. The second issue has a face value of $45 million, a coupon of 10 percent, and sells for 104 percent of par. The first issue matures in 24 years, the second in 6 years.
a)what are the company's capital structure weights on a book value basis?
equity/value=_________
debt/value=_________
b)What are the company's capital structure weights on a market value basis?
equity/value=________
debt/value=_______
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