Masterson, Inc., has 8 million shares of common stock outstanding. The current share price is $68, and the book value per share is $7. The company also has two bond issues outstanding. The first bond Issue has a face value of $65 million, has a coupon rate of 5 percent, and sells for 93 percent of par. The second issue has a face value of $50 million, has a coupon rate of 4 percent, and sells for 105 percent of par. The first Issue matures in 23 years, the second in 8 years. Both bonds make semiannual coupon payments. a. What are the company's capital structure weights on a book value basis? (Do not round Intermediate calculations and round your answers to 4 decimal places, e.g., .1616.) b. What are the company's capital structure weights on a market value basis? (Do not round Intermediate calculations and round your answers to 4 decimal places, e.g., .1616.)
c. Which are more relevant, the book or market value weights? a. Equity Value Debt/Value b. Equity/Value Debt/Value c. More relevant