Saint Nick Enterprises has 17,900 shares of common stock outstanding at a price of $71 per...

Saint Nick Enterprises has 17,900 shares of common stock outstanding at a price of $71 per share. The company has two bond issues outstanding. The first issue has 9 years to maturity, a par value of $1,000 per bond, and sells for 102.5 percent of par. The second issue matures in 23 years, has a par value of $2,000 per bond, and sells for 107.5 percent of par. The total face value of the first issue is $270,000, while the total face value of the second issue is $370,000. What is the capital structure weight of debt? Select one: .3467 .4185 .3920 .2045 .3189

Expert Solution

Solution :

The capital structure weight of debt = 0.3467

Thus the solution is Option 1

Please find the attached screenshot of excel sheet containing the detailed calculation for the above solution.

jeff jeffy answered 1 year ago

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Saint Nick Enterprises has 17,900 shares of common stock outstanding at a price of $71 per...

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