Ten Pins Manufacturing has 5 million shares of common stock outstanding. The current share price is $77, and the book value per share is $8. The company also has two bond issues outstanding. The first bond issue has a face value of $60 million and a coupon rate of 6 percent and sells for 97 percent of par. The second issue has a face value of $30 million and a coupon rate of 7 percent and sells for 105 percent of par. The first issue matures in 21 years, the second in 4 years.
a. 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., 32.1616.)
Equity/Value
Debt/Value
b. 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., 32.1616.)
Equity/Value
Debt/Value