Question
Filer Manufacturing has 4 million shares of common stock outstanding. The current share price is $70, and the book value per share is $5. Filer
Filer Manufacturing has 4 million shares of common stock outstanding. The current share price is $70, and the book value per share is $5. Filer Manufacturing also has two bond issues outstanding. The first bond issue has a face value $60 million, has a coupon of 5 percent, and sells for 95 percent of par. The second issue has a face value of $40 million, has a coupon of 6 percent, and sells for 104 percent of par. The first issue matures in 20 years, the second in 4 years. a. What are Filer's capital structure weights on a book value basis? (Do not round intermediate calculations and round your final answers to 4 decimal places. (e.g., 32.1616)) Equity / Value Debt / Value b. What are Filer's capital structure weights on a market value basis? (Do not round intermediate calculations and round your final answers to 4 decimal places. (e.g., 32.1616)) Equity / Value 0.7396 Debt / Value
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