Filer Manufacturing has 8 million shares of common stock outstanding. The curren
ID: 2736005 • Letter: F
Question
Filer Manufacturing has 8 million shares of common stock outstanding. The current share price is $87, and the book value per share is $6. Filer Manufacturing also has two bond issues outstanding. The first bond issue has a face value of $75 million and a coupon rate of 10 percent and sells for 97 percent of par. The second issue has a face value of $50 million and a coupon rate of 11 percent and sells for 105 percent of par. The first issue matures in 25 years, the second in 7 years.
What are the company’s capital structure weights on a book value basis? (Do not round intermediate calculations. Round your answers to 4 decimal places (e.g., 32.1616).)
What are the company’s capital structure weights on a market value basis? (Do not round intermediate calculations. Round your answers to 4 decimal places (e.g., 32.1616).)
a.What are the company’s capital structure weights on a book value basis? (Do not round intermediate calculations. Round your answers to 4 decimal places (e.g., 32.1616).)
b.What are the company’s capital structure weights on a market value basis? (Do not round intermediate calculations. Round your answers to 4 decimal places (e.g., 32.1616).)
Explanation / Answer
Capital Structure:
Capital Book values($) a.Book value weights($) Market values ($) b.Market value weights Common stock 48 0.2775 696 0.8475 Bond I 75 0.4335 72.75 0.0886 Bond II 50 0.2890 52.50 0.0639 173 1.0000 821.25 1.0000Related Questions
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