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Dinklage Corp. has 7 million shares of common stock outstanding. The current share price is $73,...

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Finance

Dinklage Corp. has 7 million shares of common stock outstanding.The current share price is $73, and the book value per share is $8.The company also has two bond issues outstanding. The first bondissue has a face value of $90 million, a coupon rate of 6 percent,and sells for 98 percent of par. The second issue has a face valueof $75 million, a coupon rate of 5 percent, and sells for 110percent of par. The first issue matures in 22 years, the second in7 years. Both bonds make semiannual coupon payments.

a.

What are the company's capital structure weights on a book valuebasis? (Do not round intermediate calculations and roundyour answers to 4 decimal places, e.g., .1616.)

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

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4.1 Ratings (471 Votes)
AFormulaBook valueWeightsCommon sharesNumber of sharesbookvalue per    See Answer
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