Finance question problem

Sam Company has 20 million equity shares outstanding. The book value per share is Rs 40 and the market price per share is Rs 120.
Sam Company has two debentures issues outstanding. The first issue has a face value of Rs 300 million, 12 percent coupon, and sells
for 90 percent of its face value. It will mature in 5 years. The second issue has a face value of Rs 200 million, 14 percent coupon,
and sells for 102 percent of its face value. It will mature in 6 years. Sam Company also has a bank loan of Rs 200 million on which
the interest rate is 15 percent.
Answer the following question.
Q1. What are Sam Company’s capital structure weights on a book value basis?
Q2. What are Sam Company’s capital structure weights on a market value basis?
Q3. Which weights would you use?
Q4. Why explain in detail?

 

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