b. C. 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.) 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.) Which are more relevant, the book or market value weights?

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Pandora Manufacturing has 5 million shares of common stock outstanding. The current share price is $84, and the
book value per share is $7. The company also has two bond issues outstanding. The first bond issue has a face value of
$60 million and a coupon rate of 7 percent and sells for 94 percent of par. The second issue has a face value of $35
million and a coupon rate of 8 percent and sells for 107 percent of par. The first issue matures in 22 years, the second in
4 years.
b.
C.
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.)
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.)
Which are more relevant, the book or market value weights?
a. equity value??
debit value??
b. equity value ?????
debit value??
Transcribed Image Text:Pandora Manufacturing has 5 million shares of common stock outstanding. The current share price is $84, and the book value per share is $7. The company also has two bond issues outstanding. The first bond issue has a face value of $60 million and a coupon rate of 7 percent and sells for 94 percent of par. The second issue has a face value of $35 million and a coupon rate of 8 percent and sells for 107 percent of par. The first issue matures in 22 years, the second in 4 years. b. C. 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.) 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.) Which are more relevant, the book or market value weights? a. equity value?? debit value?? b. equity value ????? debit value??
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