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.

What are the company’s capital structure weights on a book value basis?

Debt:

Equity:

What are the company’s capital structure weights on a market value basis?

Debt:

Equity:

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