Filer Manufacturing has 9 million shares of common stock
outstanding. The current share price is $81,...
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Filer Manufacturing has 9 million shares of common stockoutstanding. The current share price is $81, and the book value pershare is $8. Filer Manufacturing also has two bond issuesoutstanding. The first bond issue has a face value of $80 millionand a coupon rate of 10 percent and sells for 96 percent of par.The second issue has a face value of $50 million and a coupon rateof 11 percent and sells for 104 percent of par. The first issuematures in 25 years, the second in 8 years.
a.
What are the company’s capital structure weights on a book valuebasis? (Do not round intermediate calculations. Round youranswers to 4 decimal places (e.g., 32.1616).)
Ă‚Â Ă‚Â Equity/Value
Ă‚Â Ă‚Â Ă‚Â
Ă‚Â Ă‚Â Debt/Value
Ă‚Â Ă‚Â Ă‚Â
b.
What are the company’s capital structure weights on a marketvalue basis? (Do not round intermediate calculations. Roundyour answers to 4 decimal places (e.g., 32.1616).)
Ă‚Â Ă‚Â Ă‚Â Ă‚Â Equity/Value
Ă‚Â Ă‚Â Ă‚Â
Ă‚Â Ă‚Â Ă‚Â Ă‚Â Debt/Value
Ă‚Â Ă‚Â Ă‚Â
c.
Which are more relevant, the book or market value weights?
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a BV of equityPrice of equitynumber of shares outstanding BV of equity89000000 72000000 BV of Bond1Par valuebonds outstandingage of par BV of Bond11000800001 80000000 BV of Bond2Par valuebonds
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