A Company Has a Book Value of $8 Billion of Equity

question 39

Multiple Choice

A company has a book value of $8 billion of equity and a face value of $12 billion of debt. What are the weights in debt and equity that are used for calculating the WACC?

• A) 0.6, 0.4
• B) 0.5, 0.5
• C) 0.4, 0.6
• D) cannot be determined

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Definitions:

Cohabitation

The state of living together and having a sexual relationship without being married.

United States

A country in North America, composed of 50 states, known for its significant influence on global politics, economy, and culture.

Europe

A continent located entirely in the Northern Hemisphere and mostly in the Eastern Hemisphere, known for its rich history and diverse cultures.

Satisfying Marriage

A marital relationship that fulfills the emotional, physical, and social needs of both partners.