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Market Value Capital Structure Suppose the Schoof Company has this book value balance sheet: Current assets Fixed assets 30,000,000 70,000,000 Current liabilities Notes payable Long-term
Market Value Capital Structure Suppose the Schoof Company has this book value balance sheet: Current assets Fixed assets 30,000,000 70,000,000 Current liabilities Notes payable Long-term debt $20,000,000 $10,000,000 30,000,000 1,000,000 39,000,000 $100,000,000 Common stock (1 million shares) Retained earnings Total liabilities and equity Total assets $100,000,000 The notes payable are to banks, and the interest rate on this debt is 896, the same as the rate on new bank loans. These bank loans are not used for seasonal financing but instead are part of the company's permanent capital structure. The long-term debt consists of 30,000 bonds, each with a par value of $1,000, an annual coupon interest rate of 7%, and a 15-year maturity. The going rate of interest on new long-term debt, rd, is 10%, and this is the present yield to maturity on the bonds. The common stock sells at a price of $68 per share. Calculate the firm's market value capital structure Do not round intermediate calculations. Round your answers to two decimal places Short-term debt Long-term debt Common equity Total capital
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