A Firm Has 12,500 Shares of Stock Outstanding That Sell

question 44

Multiple Choice

A firm has 12,500 shares of stock outstanding that sell for $42 each.The book value of equity is $400,000.The firm has also issued $250,000 face value of debt that is currently quoted at 101.2.What value should be used as the weight of equity when computing WACC?

• A) 67.48%
• B) 72.09%
• C) 61.54%
• D) 69.74%

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Definitions:

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