Question

I'm having a really hard time with my financial calculator/ excel. I just need the answers $ and %

Market Value Capital Structure

Suppose the Schoof Company has this book value balance sheet:

Current assets		$30,000,000		Current liabilities		$10,000,000
Fixed assets		50,000,000		Long-term debt		30,000,000
				Common stock
				(1 million shares)		1,000,000
				Retained earnings		39,000,000
Total assets		$80,000,000		Total claims		$80,000,000

The current liabilities consist entirely of notes payable to banks, and the interest rate on this debt is 9%, the same as the rate on new bank loans. These bank loans are not used for seasonal financing but instead are part of the company's permanent capital structure. The long-term debt consists of 30,000 bonds, each with a par value of $1,000, an annual coupon interest rate of 9%, and a 25-year maturity. The going rate of interest on new long-term debt, rd, is 11%, and this is the present yield to maturity on the bonds. The common stock sells at a price of $60 per share. Calculate the firm's market value capital structure. Round your answers to two decimal places.

Short-term debt		$10,000,000		______ %
Long-term debt		$______		______ %
Common equity		$______		______ %
Total capital		$______		100%

Answer 1

Market value of Debt :

Interest = 1000*.09 = 90

Price =[PVA 11%,25*Interest ]+[PVF 11%,25 *Face value]

          = [8.42174*90]+[.07361*1000]

          = 757.96+ 73.61

          =$ 831.57

**find present value annuity factor and present value factor from there table respectively at 11% for 25 periods

short term debt	10,000,000	10,000,000/94,947,100= 10.53%
long term debt   [30000*831.57]	24,947,100	24,947,100/94,947,100= 26.27%
common equity   [1,000,000*60]	60,000,000	60,000,000/94,947,100 = 63.20%
Total capital	94,947,100	100%