Business
Business, 21.05.2021 17:10, ira51

Masterson, Inc., has 7 million shares of common stock outstanding. The current share price is $79, and the book value per share is $10. The company also has two bond issues outstanding. The first bond issue has a face value of $120 million, has a coupon rate of 4 percent, and sells for 92 percent of par. The second issue has a face value of $105 million, has a coupon rate of 3 percent, and sells for 104 percent of par. The first issue matures in 22 years, the second in 7 years. Both bonds make semiannual coupon payments. Required:
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?

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Masterson, Inc., has 7 million shares of common stock outstanding. The current share price is $79, a...

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