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Problem:

Suppose that a company's equity is currently selling for $30 per share and that there are 5 million shares outstanding. If the firm also has 20 thousand bonds outstanding, which are selling at 98 percent of par ($1,000),

Required:

Question: What are the firm's current capital structure weights for equity and debt respectively?

a. 50%, 50%

b. 88.44%, 11.56%

c. 99.60%, 0.40%

d. 88.23%, 11.77%

Note: Please show how to work it out.

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M91148766

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