Question

​(Calculating capital structure​ weights)  The common stock of​ Moe's Restaurant is currently selling for ​$82 per​ share, has a book value of ​$58 per​ share, and there are 1.16 million shares of common stock outstanding. In​ addition, the firm also has 109,000 bonds outstanding with a par value of ​$1,000 that are selling at 114 percent of par. What are the capital structure weights that​ Moe's should use to analyze its capital​ structure?

The weight of the debt in the capital structure is nothing​%. ​(Round to two decimal​ places.)

Answer 1

Weight of capital structure is calculated on the basis of market price.
				Quantity	Unit market price	Total
				a	b	c=a*b
	Common stock			1160000	$             82	$          9,51,20,000
	Outstanding bonds			109000	$       1,140	$       12,42,60,000
	Total					$       21,93,80,000
So, weight of:
Debt		$ 12,42,60,000	/	$ 21,93,80,000	=	56.64%
Equity		$    9,51,20,000	/	$ 21,93,80,000	=	43.36%
Total						100.00%