Question: 3. Determine the capital structure (market value weights to two decimal places) for the Boil-in-Oil French Fry Company that has the following securities: a. Bank
3. Determine the capital structure (market value weights to two decimal places) for the Boil-in-Oil French Fry Company that has the following securities:
a. Bank Loan: The company states that it currently has a newly issued $30 million bank loan at a rate prime +2.25%. b. Debt: The company has two bond issues. The first bond matures in 5 years, has a 9% coupon with a face value of $50 million and a yield to maturity of 7.5%. The second bond has a face value of $70 million, a 5% coupon, matures in 10 years and has a yield to maturity of 7.0%. c. Preferred Stock: The companys preferred stock has a book value of $25 per share but sells for $70 per share. There are 1 million shares outstanding. d. Common Equity: The companys common stock sells for $45 per share. There are 10 million shares outstanding.
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