Erna corp. has 7 million shares of common stock outstanding. the current share price is $73, and the book value per share is $8. erna corp. also has two bond issues outstanding. the first bond issue has a face value of $75 million, has a coupon of 8 percent, and sells for 98 percent of par. the second issue has a face value of $55 million, has a coupon of 9 percent, and sells for 107 percent of par. the first issue matures in 23 years, the second in 7 years. a. what are erna’s capital structure weights on a book value basis? (round your answer to 4 decimal places. (e. g., 32.1616)) equity/value debt/value b. what are erna’s capital structure weights on a market value basis

You are chairman of the board of a successful technology firm. there is a nominal federal corporate tax rate of 35 percent, yet the effective tax rate of the typical corporation is about 12.6%. your firm has been clever with use of transfer pricing and keeping money abroad and has barely paid any taxes over the last 5 years; during this same time period, profits were $28 billion. one member of the board feels that it is un-american to use various accounting strategies in order to avoid paying taxes. others feel that these are legal loopholes and corporations have a fiduciary responsibility to minimize taxes. one board member quoted what the ceo of exxon once said: “i’m not a u. s. company and i don’t make decisions based on what’s good for the u. s.” what are the alternatives? what are your recommendations? why do you recommend this course of action?