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Bonaime, Inc., has 6.1 million shares of common stock outstanding. The current share price is $61.10, and the book value per share is $4.10. The company also has two bond issues outstanding. The first bond issue has a face value of $70.1 million, a coupon rate of 7.1 percent, and sells for 97.5 percent of par. The second issue has a face value of $35.1 million, a coupon rate of 6.6 percent, and sells for 96.5 percent of par. The first issue matures in 21 years, the second in 13 years.

A. What are the company’s capital structure weights on a book value basis?

Book value weight of equity

Book value weight of debt

B. What are the company’s capital structure weights on a market value basis?

Market value weight of equity

Market value weight of debt

Financial Management, Finance

  • Category:- Financial Management
  • Reference No.:- M92719898

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