I was able to calculate part a, book value, but cannot figure out part b, market value. Please help. Also, do you have any advice for the answer to part c? *** See attached spreadsheet.
Filer Manufacturing has 8.5 million shares of common stock outstanding. The current share price is $55, and the book value per share is $4. Filer Manufacturing also has two bond issues outstanding. The first bond issue has a face value of $74 million, a 6 percent coupon, and sells for 90 percent of par. The second issue has a face value of $48.45 million, a 5.3 percent coupon, and sells for 92.6 percent of par. The first issue matures in 11 years, the second in 5 years. (Round answers to 4 decimal places.)
a. On a book value basis, Filer's capital structure weights, E/V and D/V, are_______ and________ , respectively.
b. On a market value basis, Filer's capital structure weights, E/V and D/V, are _______ and _________, respectively.
c. Are the book value or market value weights more relevant. Why?
a. .2173 and .7827
b. .8075 and .1925
c. Market value weights are ...
This compares the Book Value versus Market Value for WACC