Dinklage Corp. has 8 million shares of common stock outstanding. The current share price is $87, and the book value per share is $6. The company also has two bond issues outstanding. The first bond issue has a face value of $75 million, a coupon rate of 10 percent, and sells for 97 percent of par. The second issue has a face value of $50 million, a coupon rate of 11 percent, and sells for 105 percent of par. The first issue matures in 25 years, the second in 7 years.
Required:
a. What are the company's capital structure weights on a book value basis?
b. What are the company’s capital structure weights on a market value basis?
c. Which are more relevant, the book or market value weights?
Answers: 3
Business, 22.06.2019 16:50, babydolltia28
The cost of labor is significantly lower in many countries than in the united states. if you move manufacturing to a facility to a country labeled as part of the axis of evil and a threat to world peace you will increase the net income of your client by $10 million per the facility is located in a country which limits personal freedom and engages in state sponsored terrorism. imagine you are a marketing consultant. (a) what would you tell the executives to do? (b) what are the alternatives? what are your recommendations? why do you recommend this course of action?
Answers: 1
Business, 22.06.2019 17:10, alexwlodko
Storico co. just paid a dividend of $3.15 per share. the company will increase its dividend by 20 percent next year and then reduce its dividend growth rate by 5 percentage points per year until it reaches the industry average of 5 percent dividend growth, after which the company will keep a constant growth rate forever. if the required return on the company’s stock is 12 percent, what will a share of stock sell for today?
Answers: 1
Dinklage Corp. has 8 million shares of common stock outstanding. The current share price is $87, and...
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