Question
Filer Manufacturing has 9 million shares of common stock outstanding. The current share price is $81, and the book value per share is $8. The
Filer Manufacturing has 9 million shares of common stock outstanding. The current share price is $81, and the book value per share is $8. The company also has two bond issues outstanding. The first bond issue has a face value $80 million, a coupon of 10%, and sells for 96% of par. The second issue has a face value of $50 million, a coupon of 11%, and sells for 104% of par. The first issue matures in 25 years, the second in 8 years.
A) What are the company's capital structure weights on a book value basis? (Do not round intermediate calculations and round your ansers to 4 decimal places)
1) Equity/Value ____________
2) 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)
1) Equity/Value____________ (The answer is not 0.0056)
2) Debt/Value______________ (The answer is not 0.9943)
C) Which are more relevent?
1) Market value weights
2) Book value weights
********Please have someone who konws how to calculate this problem complete it because the last time I posted this question it was wrong******
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