Suppose that a company has 7.4 million shares of common stock outstanding. The companys current share price
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Suppose that a company has 7.4 million shares of common stock outstanding. The company’s current share price is $62.40, and its book value per share is $5.40. The company also has two bond issues outstanding. The first bond issue has a face value of $71.4 million, a coupon rate of 7.4 percent, and sells for 91 percent of par. The second issue has a face value of $36.4 million, a coupon rate of 7.9 percent, and sells for 90 percent of par. The first issue matures in 18 years, the second in 10 years. What are the company’s capital structure weights on a market value basis?
Related Book For
Fundamentals of corporate finance
ISBN: 978-0073382395
9th edition
Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan
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