Answer:
The company's capital structure weights on a book value basis are:
a. 28.57% for equity, and
b. 71.43% for debt.
Explanation:
Book value of equity = 7,000,000 * $6 = $42,000,000
Book value of debts = $60,000,000 + $45,000,000 = $105,000,000
Dinklage Corp.'s total value = $42,000,000 + $105,000,000 = $147,000,000
Book value weights of equity = $42,000,000 / $147,000,000 = 0.2857, or 28.57%
Book value weights of debt = = 1 - 0.2857 = 0.7143, or 71.43%
Therefore, the company's capital structure weights on a book value basis are 28.57% for equity and 71.43% for debt.
