Question
Filer Manufacturing has 9.1 million shares of common stock outstanding. The current share price is $49, and the book value per share is $4. Filer
Filer Manufacturing has 9.1 million shares of common stock outstanding. The current share price is $49, and the book value per share is $4. Filer Manufacturing also has two bond issues outstanding. The first bond issue has a face value of $82 million, has a 7 percent coupon, and sells for 92 percent of par. The second issue has a face value of $52.78 million, has a 7 percent coupon, and sells for 95.2 percent of par. The first issue matures in 10 years, the second in 7 years. Requirement 1: (a) What is Filer's capital structure weight of equity on a book value basis? (Do not round your intermediate calculations.) (b) What is Filer's capital structure weight of debt on a book value basis? (Do not round your intermediate calculations.) Requirement 2: (a) What is Filer's capital structure weight of equity on a market value basis? (Do not round your intermediate calculations.) (b) What is Filer's capital structure weight of debt on a market value basis? (Do not round your intermediate calculations.)
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