Question
Using the attached balance sheet information calculate the capital structure of the firm based on market values of the bonds, preferred stock & common stock
Using the attached balance sheet information calculate the capital structure of the firm based on market values of the bonds, preferred stock & common stock in dollars & as a percentage of the total. | ||||
Assets | $ (000,000's) | Liabilities & Equity | $ (000,000's) | |
Cash & Marketable Securities | 1 | Bonds | 10 | |
Accounts Receivable | 3 | Preferred Stock | 2 | |
Inventories | 7 | Common Stock | 10 | |
Plant & Equipment | 21 | Retained Earnings | 10 | |
Total | 32 | Total | 32 | |
Bonds Coupon Rate 8% paid annually | ||||
Maturity 10 years, yield to maturity 9% | ||||
Preferred Stock par value $20 per share, market value $15 per share | ||||
Common stock 1 million shares outstanding with a market value of $20 per share |
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