Dinklage Corp. has 9 million shares of common stock outstanding. The current share price is $75,...

70.2K

Verified Solution

Question

Finance

Dinklage Corp. has 9 million shares of common stock outstanding.The current share price is $75, and the book value per share is $6.The company also has two bond issues outstanding. The first bondissue has a face value of $100 million, a coupon rate of 4 percent,and sells for 96 percent of par. The second issue has a face valueof $85 million, a coupon rate of 3 percent, and sells for 108percent of par. The first issue matures in 24 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.)
a.
Equity/value:
Debt/value:
b.
equity/value:
debt/value:

Answer & Explanation Solved by verified expert

3.6 Ratings (544 Votes)

a Equity Value 02259 Debt Value 07741 b Equity Value 07823 Debt Value 02177 Companys capital structure weights on a book value basis Book See Answer

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!

Become a Member

Transcribed Image Text

Dinklage Corp. has 9 million shares of common stock outstanding.The current share price is $75, and the book value per share is $6.The company also has two bond issues outstanding. The first bondissue has a face value of $100 million, a coupon rate of 4 percent,and sells for 96 percent of par. The second issue has a face valueof $85 million, a coupon rate of 3 percent, and sells for 108percent of par. The first issue matures in 24 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.)a.Equity/value:Debt/value:b.equity/value:debt/value:

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.)