Question

In: Finance

Suppose that Lil John Industries’ equity is currently selling for $32 per share and that 1.5...

Suppose that Lil John Industries’ equity is currently selling for $32 per share and that 1.5 million shares are outstanding. Assume the firm also has 25,000 bonds outstanding, and they are selling at 103 percent of par.

What are the firm’s current capital structure weights? (Do not round intermediate calculations. Round your answers to 2 decimal places.)


Equity % =
Debt % =

Solutions

Expert Solution

jeff jeffy answered 2 years ago
Next > < Previous

Related Solutions

Suppose that a company's equity is currently selling for $24.50 per share and that there are...
Suppose that a company's equity is currently selling for $24.50 per share and that there are 3.2 million shares outstanding and 12 thousand bonds outstanding, which are selling at 93 percent of par. If the firm was considering an active change to their capital structure so that the firm would have a D/E of 0.5, which type of security (stocks or bonds) would they need to sell to accomplish this, and how much would they have to sell? (Round your...
Suppose that a company's equity is currently selling for $23.50 per share and that there are...
Suppose that a company's equity is currently selling for $23.50 per share and that there are 4.60 million shares outstanding. If the firm also has 36 thousand bonds outstanding, which are selling at 104.00 percent of par, what are the firm's current capital structure weights for equity and debt respectively? A. 74.28%, 25.72% B. 22.60%, 77.40% C. 50%, 50% D. 65.37% 34.63%
Suppose that a company's equity is currently selling for $26.00 per share and that there are...
Suppose that a company's equity is currently selling for $26.00 per share and that there are 5.60 million shares outstanding. If the firm also has 46 thousand bonds outstanding, which are selling at 109.00 percent of par, what are the firm's current capital structure weights for equity and debt respectively? Equity = 5,600,000 x $26 = $145,600,000, so .7438 Debt = 46,000 x 1.090 x 1,000 = $50,140,000, so .2562 Total = $195,740,000 74.38%, 25.62%
Suppose that a company's equity is currently selling for $24.75 per share and that there are...
Suppose that a company's equity is currently selling for $24.75 per share and that there are 3.3 million shares outstanding and 13 thousand bonds outstanding, which are selling at 94 percent of par. If the firm was considering an active change to their capital structure so that the firm would have a D/E of 0.6, which type of security (stocks or bonds) would they need to sell to accomplish this, and how much would they have to sell? (Round your...
Suppose that Papa Bell, Inc.'s, equity is currently selling for $41 per share, with 3.6 million...
Suppose that Papa Bell, Inc.'s, equity is currently selling for $41 per share, with 3.6 million shares outstanding. The firm also has 8,000 bonds outstanding, which are selling at 95% of par. Assume Papa Bell was considering an active change to its capital structure so as to have a D/E of 0.5. Which type of security (stocks or bonds) would the firm need to sell to accomplish this? How much would it have to sell? (Enter your answer in dollars...
Suppose that Papa Bell, Inc.’s equity is currently selling for $42 per share, with 3.7 million...
Suppose that Papa Bell, Inc.’s equity is currently selling for $42 per share, with 3.7 million shares outstanding. The firm also has 7,000 bonds outstanding, which are selling at 94 percent of par. Assume Papa Bell was considering an active change to its capital structure so as to have a D/E of 0.4. Which type of security (stocks or bonds) would the firm need to sell to accomplish this? sell bonds and buy back stock sell stocks and buy back...
You sell short 100 shares of company A which are currently selling at $32 per share....
You sell short 100 shares of company A which are currently selling at $32 per share. You post the 50% margin required on the short sale. If your broker requires a 30% maintenance margin, at what stock price will you get a margin call? You purchased 250 shares of common stock on margin for $35 per share. The initial margin is 65% and the stock pays no dividend. Your rate of return would be how much if you sell the...
A company currently pays a dividend of $1.5 per share (D0 = $1.5). It is estimated...
A company currently pays a dividend of $1.5 per share (D0 = $1.5). It is estimated that the company's dividend will grow at a rate of 17% per year for the next 2 years, then at a constant rate of 5% thereafter. The company's stock has a beta of 1.45, the risk-free rate is 3%, and the market risk premium is 3%. What is your estimate of the stock's current price? Do not round intermediate calculations. Round your answer to...
Suppose that Intel currently is selling at $50 per share. The rate on margin loan is...
Suppose that Intel currently is selling at $50 per share. The rate on margin loan is 8%. Investor A purchased 100 shares using 60% margin. Investor B sold 100 shares using 60% margin. The maintenance margin is 40%. 1. Calculate the margin call price for Investor A 2. Calculate the margin call price for Investor B
Suppose that Intel currently is selling at $50 per share. The rate on margin loan is...
Suppose that Intel currently is selling at $50 per share. The rate on margin loan is 8%. Investor A purchased 100 shares using 60% margin. Investor B sold 100 shares using 60% margin. The maintenance margin is 40%. 1. Calculate the margin call price for Investor A 2. Calculate the margin call price for Investor B
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT