Question

Book Co. has 1.4 million shares of common equity with a par? (book) value of $ 1.35?, retained earnings of $ 29.9 ?million, and its shares have a market value of $ 50.41 per share. It also has debt with a par value of $ 18.3 million that is trading at 104 % of par.

**a.** What is the market value of its? equity?

The market value of the equity is ?$ million. ?(Round to two decimal? places.)

**b.** What is the market value of its? debt?

The market value of the debt is $ million. ?(Round to two decimal? places.)

**c.** What weights should it use in computing its?
WACC?

The debt weight for the WACC calculation is ?%. ?(Round to two decimal? places.)

The equity weight for the WACC calculation is %. ?(Round to two decimal? places.)

Answer #1

a) Market value of equity = Number of shares*market price+retained earnings

Market value of equity = 1400000*50.41+29900000

Market value of equity = 70574000+29900000

Market value of equity = 100474000

b) Market value of debt= Par value*trading percentage

Market value of debt= 18300000*104/100

Market value of debt = 19032000

c)Total capital = 15.Market value of equity+Market value of debt

Total capital = 119506000

WACC debt % = Market value of debt/Total capital *100

WACC debt % = 19032000/119506000*100

WACC debt % = 15.93%

WACC equity% = Market value of equity/Total capital *
100

WACC equity% = 100474000/119506000 * 100

WACC equity% = 84.07%

Book Co has 1.6 million shares of common equity with a par
(book) value of $1.20, retained earnings of $29.6 million, and its
shares have a market value of $49.99 per share. It also has debt
with a par value of $18.3 million that is trading at 103% 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?

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...

MV Corporation has debt with market value of $ 103 ?million,
common equity with a book value of $ 105 ?million, and preferred
stock worth $ 18 million outstanding. Its common equity trades at $
46 per? share, and the firm has 5.5 million shares outstanding.
What weights should MV Corporation use in its? WACC?
The debt weight for the WACC calculation is ?%. ?(Round to two
decimal? places.)
The preferred stock weight for the WACC calculation is %. (Round...

MV Corporation has debt with market value of $ 100 million,
common equity with a book value of $ 104 million, and preferred
stock worth $ 22 million outstanding. Its common equity trades at $
53 per share, and the firm has 5.9 million shares outstanding.
What weights should MV Corporation use in its WACC? The debt
weight for the WACC calculation is nothing%. (Round to two
decimal places.

MV Corporation has debt with market value of $ 100 million,
common equity with a book value of $ 98 million, and preferred
stock worth $ 20 million outstanding. Its common equity trades at $
45 per share, and the firm has 5.9 million shares outstanding.
What weights should MV Corporation use in its WACC? The debt
weight for the WACC calculation is nothing%. (Round to two
decimal places.)

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...

Filer Manufacturing has 7 million shares of common stock
outstanding. The current share price is $86, and the book value per
share is $5. Filer Manufacturing also has two bond issues
outstanding. The first bond issue has a face value of $70 million
and a coupon rate of 9 percent and sells for 96 percent of par. The
second issue has a face value of $45 million and a coupon rate of
10 percent and sells for 104 percent of...

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...

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...

1. Del Rio Demolition Co. has 16 million shares of common stock
with a par of $1.50 with a current stock price of $87. The company
has 2 bond issues – one issue of 60,000 bonds with a 6.7% interest
rate and a current price quote of 96.25. The second issue of 75,000
bonds has a 5.1% interest rate and a current quote of 88.95. The
cost of equity is 13.7% while the cost of debt is 5.9%.
A. Calculate...

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 3 minutes ago

asked 5 minutes ago

asked 6 minutes ago

asked 28 minutes ago

asked 29 minutes ago

asked 37 minutes ago

asked 41 minutes ago

asked 53 minutes ago

asked 53 minutes ago

asked 56 minutes ago

asked 1 hour ago

asked 1 hour ago