Hero Manufacturing has 6 million shares of common stock outstanding. The current share price is $72...

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Hero Manufacturing has 6 million shares of common stockoutstanding. The current share price is $72 and the book value pershare is $7. The company also has two bond issues outstanding, bothwith semiannual coupons. The first bond issue has a face value $70million and a coupon of 7 percent and sells for 97 percent of par.The second issue has a face value of $50 million and a coupon of 8percent and sells for 106 percent of par. The first issue maturesin 22 years, the second in 6 years.
a. What are the company's capital structure weights on a bookvalue basis? (Do not round intermediate calculations and round youranswers 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 and round youranswers to 4 decimal places, e.g., .1616.)

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Answer a Debt 1st Issue of Bonds Book Value 70000000 2nd Issue of Bonds Book Value 50000000 Book Value of Debt Book Value of 1st Issue of Bonds Book Value of 2nd Issue of Bonds Book Value of Debt 70000000 50000000 Book Value of Debt 120000000 Equity Number of shares outstanding 6000000 Book value per share 7 Book Value of Equity Number of See Answer

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Hero Manufacturing has 6 million shares of common stockoutstanding. The current share price is $72 and the book value pershare is $7. The company also has two bond issues outstanding, bothwith semiannual coupons. The first bond issue has a face value $70million and a coupon of 7 percent and sells for 97 percent of par.The second issue has a face value of $50 million and a coupon of 8percent and sells for 106 percent of par. The first issue maturesin 22 years, the second in 6 years.a. What are the company's capital structure weights on a bookvalue basis? (Do not round intermediate calculations and round youranswers 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 and round youranswers to 4 decimal places, e.g., .1616.)