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Rafferty Corp's stock sells for $50.00 per share, and their bonds sell at par and have a face value of $1000. If the company has 400,000 shares outstanding and 30,000 bonds outstanding, then what is Rafferty's capital structure value for the weight of equity (We)? 

          Rafferty Corp's stock sells for $50.00 per share, and their bonds sell at par and have a face value of $1000. If the company has 400,000 shares outstanding and 30,000 bonds outstanding, then what is Rafferty's capital structure value for the weight of equity (We)?
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Horngren’s Cost Accounting
Horngren’s Cost Accounting
Srikant M. Datar, Madhav V. Rajan 16th Edition
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Rafferty Corp's stock sells for $50.00 per share, and their bonds sell at par and have a face value of $1000. If the company has 400,000 shares outstanding and 30,000 bonds outstanding, then what is Rafferty's capital structure value for the weight of equity (We)?
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Suppose that a company's equity is currently selling for $30 per share and that there are 5 million shares outstanding. If the firm also has 20 thousand bonds outstanding, which are selling at 98 percent of par ($1,000), what are the firm's current capital structure weights for equity and debt respectively?

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Transcript

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00:01 Here, total market value of equity is equals to dollar 30 per share multiply by 5 million that is equals to dollar 150 million per share.
00:31 Now, total market value of debt that is equals to 2000 bonds multiply by 0 .98 multiply by 1000 that is equals to dollar 19 .6 million.
00:57 Now, total value of the firm is equals to total market value of equity plus total market value of debt that is equals to dollar 150 million plus dollar 19 .6 million that is equals to dollar 169 .6 million...
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