Question
The market price of Albertson Ltd.'s common stock is $5.50 and 100,000 shares are outstanding. The firm's books show common equity accounts totaling $400,000. There
The market price of Albertson Ltd.'s common stock is $5.50 and 100,000 shares are outstanding. The firm's books show common equity accounts totaling $400,000. There are 5,000 preferred shares outstanding that originally sold for their par value of $50, pay an annual dividend of $3, and are currently selling to yield an 8% return. Also, 200 bonds are outstanding that were issued 5 years ago at their $1,000 face values for 30-year terms, pay a coupon rate of 7.3%, and are currently selling to yield 10%. Assume that the coupon payments are semi-annual. Develop Albertson's capital structure based on both book and market values. Round the values to the nearest dollar. Round the weights to three decimal places. Enter the weights in whole numbers and not in percentages. Do not round your intermediate calculations, except round PVF and PVFA values in intermediate calculations to four decimal places.
Book Weights Market Weights
Debt $ $
Preferred Stock
Common Equity $ $
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