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Filer Manufacturing has 9.6 million shares of common stock outstanding. The current share price is $56, 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 $86 million, has a 6 percent coupon, and sells for 91 percent of par. The second issue has a face value of $67.2 million, has a 6 percent coupon, and sells for 95.3 percent of par. The first issue matures in 10 years, the second in 7 years.

Requirement 1:

(a) What is Filer's capital structure weight of equity on a book value basis? (Do not round your intermediate calculations.)

(b) What is Filer's capital structure weight of debt on a book value basis? (Do not round your intermediate calculations.)

Requirement 2:

(a) What is Filer's capital structure weight of equity on a market value basis? (Do not round your intermediate calculations.)

(b) What is Filer's capital structure weight of debt on a market value basis? (Do not round your intermediate calculations.)

Financial Management, Finance

  • Category:- Financial Management
  • Reference No.:- M91941793

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