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Market Value Capital Structure Suppose the School Company has this book value balance sheet: The notes payable are to banks, and the interest rate on
Market Value Capital Structure Suppose the School Company has this book value balance sheet: The notes payable are to banks, and the interest rate on this debt is 11%, 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 6%, and a 15-year maturity. The going rate of interest on new long-term debt, r_d, is 12%, and this is the present yield to maturity on the bonds. The common stock sells at a price of $70 per share. Calculate the firm's market value capital structure. Do not round intermediate calculations. Round your answers to two decimal places
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