Filer manufacturing has 8 million shares of common stock


Filer Manufacturing has 8 million shares of common stock outstanding. The current share price is $87, and the book value per share is $6. Filer Manufacturing also has two bond issues outstanding. The first bond issue has a face value of $75 million and a coupon rate of 10 percent and sells for 97 percent of par. The second issue has a face value of $50 million and 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. a. What are the company’s capital structure weights on a book value basis? Equity/Value Debt/Value b. What are the company’s capital structure weights on a market value basis? (Do not round intermediate calculations. Round your answers to 4 decimal places (e.g., 32.1616).) Equity/Value Debt/Value c. Which are more relevant, the book or market value weights? Market value Book value.

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Financial Management: Filer manufacturing has 8 million shares of common stock
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