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Book Co. has 1.2 million shares of common equity with a par​ (book) value of $...

Book Co. has 1.2 million shares of common equity with a par​ (book) value of $ 1.05​, retained earnings of $ 28.3 ​million, and its shares have a market value of $ 48.83 per share. It also has debt with a par value of $ 18.7 million that is trading at 101 % of par. a. What is the market value of its​ equity? b. What is the market value of its​ debt? c. What weights should it use in computing its​ WACC? a. What is the market value of its​ equity? The market value of the equity is ​$ nothing million.

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Answer #1
Capital Structure weights on a market value basis
Particulars Number Book Value Market Value Weights
Debt            18,700.00             1,010.00      18,887,000.00 24.38%
Common Equity      1,200,000.00                   48.83      58,596,000.00 75.62%
     77,483,000.00 100.00%
market value of its​ equity    58,596,000.00
market value of its​ debt    18,887,000.00
Weight of Debt 24.38%
Weight of Equity 75.62%
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