Suppose the Schoof Company has this book value balance sheet:
Current assets $30,000,000 Current liabilities $10,000,000 Fixed assets 50,000,000 Long-term debt 30,000,000 Common stock (1 million shares) 1,000,000 Retained earnings 39,000,000 Total assets $80,000,000 Total claims $80,000,000
The current liabilities consist entirely of notes payable to banks, and the interest rate on this debt is 10%, the same as the rate on new bank loans. These bank loans are not used for seasonal financing but instead are part of the company's permanent capital structure. The long-term debt consists of 30,000 bonds, each with a par value of $1,000, an annual coupon interest rate of 9%, and a 15-year maturity. The going rate of interest on new long-term debt, rd, is 12%, and this is the present yield to maturity on the bonds. The common stock sells at a price of $62 per share. Calculate the firm's market value capital structure. Round your answers to two decimal places.
Short-term debt $ % Long-term debt $ % Common equity $ % Total capital $ %
Suppose the Schoof Company has this book value balance sheet:
| Current assets | $30,000,000 | Current liabilities | $10,000,000 | |||
| Fixed assets | 50,000,000 | Long-term debt | 30,000,000 | |||
| Common stock | ||||||
| (1 million shares) | 1,000,000 | |||||
| Retained earnings | 39,000,000 | |||||
| Total assets | $80,000,000 | Total claims | $80,000,000 |
The current liabilities consist entirely of notes payable to banks, and the interest rate on this debt is 10%, the same as the rate on new bank loans. These bank loans are not used for seasonal financing but instead are part of the company's permanent capital structure. The long-term debt consists of 30,000 bonds, each with a par value of $1,000, an annual coupon interest rate of 9%, and a 15-year maturity. The going rate of interest on new long-term debt, rd, is 12%, and this is the present yield to maturity on the bonds. The common stock sells at a price of $62 per share. Calculate the firm's market value capital structure. Round your answers to two decimal places.
| Short-term debt | $ | % | ||
| Long-term debt | $ | % | ||
| Common equity | $ | % | ||
| Total capital | $ | % |
Related questions
Market Value Capital Structure
Suppose the Schoof Company has this book value balance sheet:
| Current assets | $30,000,000 | Current liabilities | $10,000,000 | |||
| Fixed assets | 50,000,000 | Long-term debt | 30,000,000 | |||
| Common stock | ||||||
| (1 million shares) | 1,000,000 | |||||
| Retained earnings | 39,000,000 | |||||
| Total assets | $80,000,000 | Total claims | $80,000,000 |
The current liabilities consist entirely of notes payable to banks, and the interest rate on this debt is 10%, the same as the rate on new bank loans. These bank loans are not used for seasonal financing but instead are part of the company's permanent capital structure. The long-term debt consists of 30,000 bonds, each with a par value of $1,000, an annual coupon interest rate of 7%, and a 25-year maturity. The going rate of interest on new long-term debt, rd, is 12%, and this is the present yield to maturity on the bonds. The common stock sells at a price of $62 per share. Calculate the firm'smarket value capital structure. Round your answers to two decimal places.
| Short-term debt | $ | % | ||
| Long-term debt | $ | % | ||
| Common equity | $ | % | ||
| Total capital | $ | % |
Market Value Capital Structure
Suppose the Schoof Company has this book value balance sheet:
| Current assets | $30,000,000 | Current liabilities | $20,000,000 | |||
| Fixed assets | 70,000,000 | Notes payable | $10,000,000 | |||
| Long-term debt | 30,000,000 | |||||
| Common stock (1 million shares) | 1,000,000 | |||||
| Retained earnings | 39,000,000 | |||||
| Total assets | $100,000,000 | Total liabilities and equity | $100,000,000 |
The notes payable are to banks, and the interest rate on this debt is 7%, the same as the rate on new bank loans. These bank loans are not used for seasonal financing but instead are part of the company's permanent capital structure. The long-term debt consists of 30,000 bonds, each with a par value of $1,000, an annual coupon interest rate of 8%, and a 15-year maturity. The going rate of interest on new long-term debt, rd, is 11%, and this is the present yield to maturity on the bonds. The common stock sells at a price of $70 per share. Calculate the firm's market value capital structure. Do not round intermediate calculations. Round your answers to two decimal places.
| Short-term debt | $ | % | ||
| Long-term debt | ||||
| Common equity | ||||
| Total capital | $ | % |
Market Value Capital Structure
Suppose the Schoof Company has this book value balance sheet:
| Current assets | $30,000,000 | Current liabilities | $20,000,000 | |||
| Fixed assets | 70,000,000 | Notes payable | $10,000,000 | |||
| Long-term debt | 30,000,000 | |||||
| Common stock (1 million shares) | 1,000,000 | |||||
| Retained earnings | 39,000,000 | |||||
| Total assets | $100,000,000 | Total liabilities and equity | $100,000,000 |
The notes payable are to banks, and the interest rate on this debt is 9%, the same as the rate on new bank loans. These bank loans are not used for seasonal financing but instead are part of the company's permanent capital structure. The long-term debt consists of 30,000 bonds, each with a par value of $1,000, an annual coupon interest rate of 6%, and a 20-year maturity. The going rate of interest on new long-term debt, rd, is 11%, and this is the present yield to maturity on the bonds. The common stock sells at a price of $68 per share. Calculate the firm's market value capital structure. Do not round intermediate calculations. Round your answers to two decimal places.
Short-term Debt $_____________ _______________%
Long-term Debt $_____________ _______________%
Common Equity $_____________ _______________%
Total Capital $_____________ _______________%
