Calculate the companys book value debt to equity ratio


A company's book value of equity is $200 million, and its book value cost of equity is 25%. It has 2 million shares outstanding with a price per share of $125. Its beta is 1.45. The risk free rate is 2.25% and the return on the market is 18.50%. The company also has two bonds. The book value of bond 1 is $50 million and its coupon rate is 10%. The book value of bond 2 is $50 million and its coupon rate is 12%. The current yield to maturity for bond 1 is 9% and the current yield to maturity for bond 2 is 14%. Bond 1 's price is $1, 025 and bond 2's price is $940. The company's tax rate is 35%.

1. Calculate the company's book value debt to equity ratio.

2. Calculate the company's book value cost of debt.

3. Calculate the company's book value WACC.

4. Calculate the company's market value debt to equity ratio.

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Financial Management: Calculate the companys book value debt to equity ratio
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