Dinklage Corp. has 8 million shares of common stock outstanding. The current share price is $74, and the book value per share is $7. The company also has two bond issues outstanding. The first bond issue has a face value of $95 million, a coupon rate of 7 percent, and sells for 97 percent of par. The second issue has a face value of $80 million, a coupon rate of 6 percent, and sells for 109 percent of par. The first issue matures in 23 years, the second in 6 years. Both bonds make semiannual coupon payments.

a.	What are the company's capital structure weights on a book value basis? (Do not round intermediate calculations and round your answers to 4 decimal places, e.g., .1616.)
b.	What are the company’s capital structure weights on a market value basis? (Do not round intermediate calculations and round your answers to 4 decimal places, e.g., .1616.)

Answer rating: 100% (QA)

Okay lets solve this question part by part Part a First lets understand what capital structure weights mean It refers to the proportion of each type o... View the full answer