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Tempest Manufacturing has 8 million shares of common stock outstanding. The current share price is $73, and the book value per share is $7. Tempest
Tempest Manufacturing has 8 million shares of common stock outstanding. The current share price is $73, and the book value per share is $7. Tempest Manufacturing also has two bond issues outstanding. The first bond issue has a face value of $85 million and a 7% coupon, and sells for 97% of par. The second issue has a face value of $50 million, has an 8% coupon, and sells for 108% of par. The first issue matures in 21 years, the second in six years. a. What are the company's capital structure weights on a book value basis? (Do not round intermediate calculations. Enter your answers as a percentage rounded to 4 decimal places. Omit $ sign in your response.) b. What are the company's capital structure weights on a market value basis? (Do not round intermediate calculations. Enter your answers as a percentage rounded to 4 decimal places. Omit $ sign in your response.)
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