Suppose that Lil John Industries' equity is currently selling for $37 per share and that there are 2 million shares outstanding. If the firm also has 50 thousand bonds outstanding, which are selling at 103 percent of par, what are the firm's current capital structure weights?
Capital structure weights are the proportion of capital components - debt and equity in the capital structure.
We calculate the market ...
The solution explains how to determine the capital structure weights