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).)
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).)
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