Problem
Dani Corporation has 7 million shares of common stock outstanding. The current share price is $73 and the book value per share is $8. The company also has two bond issues outstanding, both with semiannual coupons. The first bond issue has a face value $75 million, a coupon of 8 percent, and sells for 98 percent of par. The second issue has a face value of $55 million, a coupon of 9 percent, and sells for 107 percent of par. The first issue matures in 23 years, the second in 7 years.
1. What are the company's capital structure weights on a book value basis?
2. What are the company's capital structure weights on a market value basis?