Question

Dinklage Corp. has 8 million shares of common stock outstanding. The current share price is $74,...

Dinklage Corp. has 8 million shares of common stock outstanding. The current share price is $74, and the book value per share is $5. The company also has two bond issues outstanding. The first bond issue has a face value of $80 million, a coupon of 9 percent, and sells for 95 percent of par. The second issue has a face value of $60 million, a coupon of 10 percent, and sells for 108 percent of par. The first issue matures in 24 years, the second in 8 years.

a.

What are the company's capital structure weights on a book value basis? (Do not round intermediate calculations and round your answers to 4 decimal places, e.g., 32.1616.)

  Equity/Value   
  Debt/Value   
b.

What are the company’s capital structure weights on a market value basis? (Do not round intermediate calculations and round your answers to 4 decimal places, e.g., 32.1616.)

    Equity/Value   
    Debt/Value   
c.

Which are more relevant, the book or market value weights?

Market value
Book value

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Dinklage Corp. has 9 million shares of common stock outstanding. The current share price is $81,...
Dinklage Corp. has 9 million shares of common stock outstanding. The current share price is $81, and the book value per share is $8. The company also has two bond issues outstanding. The first bond issue has a face value of $80 million, a coupon of 10 percent, and sells for 96 percent of par. The second issue has a face value of $50 million, a coupon of 11 percent, and sells for 104 percent of par. The first issue...
Dinklage Corp. has 5 million shares of common stock outstanding. The current share price is $71,...
Dinklage Corp. has 5 million shares of common stock outstanding. The current share price is $71, and the book value per share is $6. The company also has two bond issues outstanding. The first bond issue has a face value of $65 million, a coupon of 6 percent, and sells for 96 percent of par. The second issue has a face value of $45 million, a coupon of 7 percent, and sells for 105 percent of par. The first issue...
Dinklage Corp. has 6 million shares of common stock outstanding. The current share price is $78,...
Dinklage Corp. has 6 million shares of common stock outstanding. The current share price is $78, and the book value per share is $5. The company also has two bond issues outstanding. The first bond issue has a face value of $65 million, a coupon of 7 percent, and sells for 98 percent of par. The second issue has a face value of $35 million, a coupon of 8 percent, and sells for 106 percent of par. The first issue...
Dinklage Corp. has 4 million shares of common stock outstanding. The current share price is $70,...
Dinklage Corp. has 4 million shares of common stock outstanding. The current share price is $70, and the book value per share is $5. The company also has two bond issues outstanding. The first bond issue has a face value of $60 million, a coupon of 5 percent, and sells for 95 percent of par. The second issue has a face value of $40 million, a coupon of 6 percent, and sells for 104 percent of par. The first issue...
Dinklage Corp. has 7 million shares of common stock outstanding. The current share price is $68,...
Dinklage Corp. has 7 million shares of common stock outstanding. The current share price is $68, and the book value per share is $8. The company also has two bond issues outstanding. The first bond issue has a face value of $70 million, a coupon rate of 6 percent, and sells for 97 percent of par. The second issue has a face value of $40 million, a coupon rate of 6.5 percent, and sells for 108 percent of par. The...
Erna Corp. has 8 million shares of common stock outstanding. The current share price is $87,...
Erna Corp. has 8 million shares of common stock outstanding. The current share price is $87, and the book value per share is $6. Erna Corp. also has two bond issues outstanding. The first bond issue has a face value of $75 million, has a coupon of 10 percent, and sells for 97 percent of par. The second issue has a face value of $50 million, has a coupon of 11 percent, and sells for 105 percent of par. The...
Erna Corp. has 8 million shares of common stock outstanding. The current share price is $73,...
Erna Corp. has 8 million shares of common stock outstanding. The current share price is $73, and the book value per share is $7. Erna Corp. also has two bond issues outstanding. The first bond issue has a face value of $85 million, has a 7 percent coupon, and sells for 97 percent of par. The second issue has a face value of $50 million, has an 8 percent coupon, and sells for 108 percent of par. The first issue...
Dinklage Corp. has 10.1 million shares of common stock outstanding. The current share price is $53,...
Dinklage Corp. has 10.1 million shares of common stock outstanding. The current share price is $53, and the book value per share is $5. The company also has two bond issues outstanding. The first bond issue has a face value of $81 million, has a 7 percent coupon, and sells for 92 percent of par. The second issue has a face value of $56.56 million, has a 7 percent coupon, and sells for 96.2 percent of par. The first issue...
Dinklage Corp. has 8.1 million shares of common stock outstanding. The current share price is $57,...
Dinklage Corp. has 8.1 million shares of common stock outstanding. The current share price is $57, and the book value per share is $6. The company also has two bond issues outstanding. The first bond issue has a face value of $68 million, has a 9 percent coupon, and sells for 95 percent of par. The second issue has a face value of $55.08 million, has a 9 percent coupon, and sells for 99.1 percent of par. The first issue...
Dinklage Corp. has 9.1 million shares of common stock outstanding. The current share price is $51,...
Dinklage Corp. has 9.1 million shares of common stock outstanding. The current share price is $51, and the book value per share is $4. The company also has two bond issues outstanding. The first bond issue has a face value of $79 million, has a 7 percent coupon, and sells for 91 percent of par. The second issue has a face value of $64.61 million, has a 7 percent coupon, and sells for 95.1 percent of par. The first issue...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT