Question
Filer Manufacturing has 4 million shares of common stock outstanding. The current share price is $76, and the book value per share is $5. The
Filer Manufacturing has 4 million shares of common stock outstanding. The current share price is $76, and the book value per share is $5. The company also has two bond issues outstanding. The first bond issue has a face value $90 million, a coupon of5 percent, and sells for 94 percent of par. The second issue has a face value of $70 million, a coupon of6 percent, and sells for 104 percent of par. The first issue matures in 20 years, the second in 3 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 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., 32.1616.) |
Equity / Value | |
Debt / Value |
c. | Which are more relevant? | ||
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