Business, 03.12.2019 22:31 jaylaa04

3.4 million shares of common stock outstanding. the current share price is $84.50, and the book value per share is $8.75. the company also has two bond issues outstanding. the first bond issue has a face value of $71 million, a coupon rate of 5.1 percent, and sells for 95.5 percent of par. the second issue has a face value of $43 million, a coupon rate of 5.7 percent, and sells for 104.5 percent of par. the first issue matures in 21 years, the second in 9 years. the most recent dividend was $3.98 and the dividend growth rate is 4.1 percent. assume that the overall cost of debt is the weighted average of that implied by the two outstanding debt issues. both bonds make semiannual payments. the tax rate is 21 percent.

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., .1616.)
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., .1616.)
c. which are more relevant, the book or market value weights?

Answers: 1

Show answers

Another question on Business

Business, 21.06.2019 19:30

How can a poor housing market put home buyers in a financially unstable position? a. changing property values means it’s easier to find homes with low rental costs. b. when the home value decreases, property taxes and insurance costs increase. c. houses are valued lower than their purchase prices, so the home equity decreases. d. home buyers lose all tax benefits and tax incentives when the housing market goes down. e. mortgage payments can increase even though the home value decreases.

Answers: 1

Answer

Business, 21.06.2019 20:30

Which of the following best describes how the federal reserve bank banks during a bank run? a. the federal reserve bank regulates exchanges to prevent the demand for withdrawals from rising above the required reserve ratio. b. the federal reserve bank acts as an insurance company that pays customers if their bank fails. c. the federal reserve bank has the power to take over a private bank if customers demand too many withdrawals. d. the federal reserve bank can provide a short-term loan to banks to prevent them from running out of money. 2b2t

Answers: 2

Answer

Business, 22.06.2019 08:10

Bakery has bought 250 pounds of muffin dough. they want to make waffles or muffins in half-dozen packs out of it. half a dozen of muffins requires 1 lb of dough and a pack of waffles uses 3/4 lb of dough. it take bakers 6 minutes to make a half-dozen of waffles and 3 minutes to make a half-dozen of muffins. their profit will be $1.50 on each pack of waffles and $2.00 on each pack of muffins. how many of each should they make to maximize profit, if they have just 20 hours to do everything?

Answers: 3

Answer

Business, 22.06.2019 10:30

Issued to the joint planning and execution community (jpec) initiates the development of coas; it also requests that the supported ccdr submit a commander's estimate of the situation with a recommended coa to resolve the situation (joint force command and staff participation in the joint operation planning and execution system, page 10)

Answers: 2

Answer

You know the right answer?

3.4 million shares of common stock outstanding. the current share price is $84.50, and the book valu...

Questions