Suppose the Schoof Company has this book value balance sheet: ...
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Accounting
Suppose the Schoof Company has this book value balance sheet:
Current assets
$30,000,000
Current liabilities
$20,000,000
Fixed assets
70,000,000
Notes payable
$10,000,000
Long-term debt
30,000,000
Common stock (1 million shares)
1,000,000
Retained earnings
39,000,000
Total assets
$100,000,000
Total liabilities and equity
$100,000,000
The notes payable are to banks, and the interest rate on this debt is 10%, the same as the rate on new bank loans. These bank loans are not used for seasonal financing but instead are part of the company's permanent capital structure. The long-term debt consists of 30,000 bonds, each with a par value of $1,000, an annual coupon interest rate of 6%, and a 20-year maturity. The going rate of interest on new long-term debt, rd, is 10%, and this is the present yield to maturity on the bonds. The common stock sells at a price of $50 per share. Calculate the firm's market value capital structure. Do not round intermediate calculations. Round the monetary values to the nearest cent and percentage values to two decimal places.
Short-term debt
$
%
Long-term debt
Common equity
Total capital
$
%
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