Suppose that Papa Bell, Inc.s, equity is currently selling for $55 per share, with 4 million shares

Question:

Suppose that Papa Bell, Inc.’s, equity is currently selling for $55 per share, with 4 million shares outstanding. If the firm also has 17 thousand bonds outstanding, which are selling at 94 percent of par, what are the firm’s current weights?

Capital Structure
Capital structure refers to a company’s outstanding debt and equity. The capital structure is the particular combination of debt and equity used by a finance its overall operations and growth. Capital structure maximizes the market value of a...