Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Hankins Corporation has 7.8 million shares of common stock outstanding, 530,000 shares of 7.3 percent preferred stock outstanding, and 178,000 of 8.5 percent semiannual bonds

Hankins Corporation has 7.8 million shares of common stock outstanding, 530,000 shares of 7.3 percent preferred stock outstanding, and 178,000 of 8.5 percent semiannual bonds outstanding, par value $1,000 each. The common stock currently sells for $64.30 per share and has a beta of 1.23, the preferred stock currently sells for $107.70 per share, and the bonds have 14 years to maturity and sell for 94.5 percent of par. The market risk premium is 6.95 percent, T-bills are yielding 5.65 percent, and the firms tax rate is 40 percent. a. What is the firm's market value capital structure?

Market value weight of debt ?
Market value weight of preferred stock ?
Market value weight of equity ?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Structured Finance Leveraged Buyouts Project Finance Asset Finance And Securitization

Authors: Charles-Henri Larreur

1st Edition

1119371104, 978-1119371106

More Books

Students also viewed these Finance questions

Question

=+b) State the hypotheses.

Answered: 1 week ago

Question

3. Describe the process of a union drive and election.

Answered: 1 week ago

Question

6. What actions might make employers lose elections?

Answered: 1 week ago