Regions, Inc., has 6.8 million shares of common stock outstanding. The current s
ID: 2680800 • Letter: R
Question
Regions, Inc., has 6.8 million shares of common stock outstanding. The current share price is $61.80, and the book value per share is $4.8. Regions also has two bond issues outstanding. The first bond issue has a face value of $70.8 million, a 7.3 percent coupon, and sells for 94.0 percent of par. The second issue has a face value of $35.8 million, a 7.3 percent coupon, and sells for 93.0 percent of par. The first issue matures in 19 years, the second in 11 years. Required: (a) What are the company
Explanation / Answer
book value equity = 6.8*4.8 =$32.64 million book value debt = $70.8 million+ $35.8 million=106.6 milion therefore book value weight of equity is= 32.64/(32.64+106.6)= 23.44% book value weight of debt= 106.6/(32.64+106.6)= 76.56%