Dinklage Corp has 4 million shares of common stock outstanding. The current share price is $83, 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 $90 million, a coupon of 6%, and sells for 98% of par. The second issue has a face value of $60 million, a coupon of 7%, and sells for 106% of par. The first issue matures in 21 years, the second in 3 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?
Equity/ Value=
Debt/Value=