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Business, 24.04.2021 01:00 Bhoom1871

Dinklage Corp. has 8 million shares of common stock outstanding. The current share price is $87, and the book value per share is $6. The company also has two bond issues outstanding. The first bond issue has a face value of $75 million, a coupon rate of 10 percent, and sells for 97 percent of par. The second issue has a face value of $50 million, 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. Required:
a. What are the company's capital structure weights on a book value basis?
b. What are the company’s capital structure weights on a market value basis?
c. Which are more relevant, the book or market value weights?

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Dinklage Corp. has 8 million shares of common stock outstanding. The current share price is $87, and...
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