Question
Vedder, Inc., has 7.2 million shares of common stock outstanding. The current share price is $62.20, and the book value per share is $5.20. Vedder
Vedder, Inc., has 7.2 million shares of common stock outstanding. The current share price is $62.20, and the book value per share is $5.20. Vedder also has two bond issues outstanding. The first bond issue has a face value of $71.2 million, a coupon rate of 7.2 percent, and sells for 92 percent of par. The second issue has a face value of $36.2 million, a coupon rate of 7.7 percent, and sells for 91 percent of par. The first issue matures in 22 years, the second in 14 years.
(a) | What are the companys capital structure weights on a book value basis? (Do not round intermediate calculations. Round your answers to 4 decimal places (e.g., 32.1616).) |
Book value weight of equity: | |
Book value weight of debt: |
(b) | What are the companys capital structure weights on a market value basis? (Do not round intermediate calculations. Round your answers to 4 decimal places (e.g., 32.1616).) |
Market value weight of equity: | |
Market value weight of debt: |
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