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Dinklage Corp. has 9 million shares of common stock outstanding. The current share price is $88, and the book value per share is $7. The
Dinklage Corp. has 9 million shares of common stock outstanding. The current share price is $88, 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 $80 million, a coupon of5 percent, and sells for 98 percent of par. The second issue has a face value of $55 million, a coupon of6 percent, and sells for 106 percent of par. The first issue matures in 20 years, the second in 8 years.
a.What are the company's capital structure weights on a book value basis?
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