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Hero Manufacturing has 8 million shares of common stock outstanding

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Hero Manufacturing has 8 million shares of common stock outstanding. The current share price is $87 and the book value per share is $6. The company also has two bond issues outstanding, both with semiannual coupons. The first bond issue has a face value $75 million and a coupon of 10 percent and sells for 97 percent of par. The second issue has a face value of $50 million and a coupon of 11 percent and sells for 105 percent of par. The first issue matures in 25 years, the second in 7 years.

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?

• Market value weights
• Book value weights