Filer Manufacturing has 9.1 million shares of common stock outstanding. The curr
ID: 2634992 • Letter: F
Question
Filer Manufacturing has 9.1 million shares of common stock outstanding. The current share price is $59, and the book value per share is $4. Filer Manufacturing also has two bond issues outstanding. The first bond issue has a face value of $76 million, has a 7 percent coupon, and sells for 90 percent of par. The second issue has a face value of $60.06 million, has a 7 percent coupon, and sells for 93.5 percent of par. The first issue matures in 9 years, the second in 5 years.
What is Filer's capital structure weight of equity on a book value basis? .2195,.2005,.2174,.21111,.2216
What is Filer's capital structure weight of debt on a book value basis? .8126,.7889,.8284,.8447,.7711
What is Filer's capital structure weight of equity on a market value basis? .8523,.836,.8117,.8447,.7711
What is Filer's capital structure weight of debt on a market value basis? .1883,.194,.1958,.1789,.1977
Please show ALL your work, I need help figuring out the steps
What is Filer's capital structure weight of debt on a book value basis? .8126,.7889,.8284,.8447,.7711
What is Filer's capital structure weight of equity on a market value basis? .8523,.836,.8117,.8447,.7711
What is Filer's capital structure weight of debt on a market value basis? .1883,.194,.1958,.1789,.1977
Please show ALL your work, I need help figuring out the steps
Explanation / Answer
Book Value of the share=9.1*4 36.4 Market Value of the share=9.1*59 536.9 Book Value of First Bond 76 Market Value of the first bond=76*0.90 68.4 Book Value of the Second Bond 60.06 Market Value of the Second Bond=60.06*0.935 56.16 capital structure weight of equity on a book value basis=36.4/(36.4+76+60.06) 0.21106 weight of debt on a book value basis=(76+60.06)/(76+60.06+36.4) 0.7889 weight of equity on a market value basis=536.9/(536.9+68.4+56.16) 0.8117 weight of debt on a market value basis=(68.4+56.16)/(68.4+56.16+536.9) 0.1883
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