Question

Mantra has 12,000 shares of stock each with a book value of $40. The shares are...

Mantra has 12,000 shares of stock each with a book value of $40. The shares are selling in the marketplace (on a stock exchange) for $60 each. Mantra also has bonds with a total book value of $250,000. The bonds are divided into increments, each with a face value of $1,000 and each is selling for a market price of $1,120 which is a 12% premium. What is the proportion of equity funding for Mantra? Please provide your answer in the following format: if you believe that equity funding constitutes 13% of the total funding proportion, you should enter 13.0 in the answer box. （Please show me the process. Thanks）
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Answer #1

The above question has two kinds of capital structuring.
1. Equity
2. Bonds
On the basis of book value and on the basis of market value the financial value of equity is as follows.

So on the basis of book value equity proportion is 66% i.e 66.0

On the basis of Market value equity proportion is 72% i.e 72.0.

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