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Vedder, Inc. owns 5 million common shares outstanding. Current share price is $73 and book value per share is $9. Vedder also has two outstanding

Vedder, Inc. owns 5 million common shares outstanding. Current share price is $73 and book value per share is $9. Vedder also has two outstanding bond issues. The initial bond issue has a face value of $60 million, with a coupon rate of 7 percent and selling at 98 percent of the pair. The second issue's face value is $40 million, the coupon rate is 6.5 percent, and it's selling at 97 percent of the pair. The first issue matures in 20 years, the second in 12 years.

Necessary:

(a)

What are the capital structure weights of the company on the basis of book value?

(b)

What are the capital structure weights of the company on the basis of market value? 


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