Total Assets $100,000,000 Total Liabilities and Equity $100,000,000
The long-term debt consists of 40,000 bonds outstanding with a par value of $1,000 each. The annual coupon rate on the bonds is 6%, paid semiannually, and the bonds have 20-years to maturity. The current market rate of interest (yield to maturity) on 20-year debt, rd is 10%. What is the current market price of one bond?
The total market value of the long-term debt is:
The company's common stock currently sells for $60 per share. Calculate market value capital structure (percent each of debt financing and equity financing) in the market value capital structure.
Market Value Capital Structure is: (fill in the blanks)
Market Value Long-term debt $_________ _____%
Market Value Common equity _________ _____%
Total Market Value debt and equity $________ 100.00%
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
