What Equity Proportion Should Be Used When Calculating WACC for a Firm

question 33

Multiple Choice

What equity proportion should be used when calculating WACC for a firm with $50 million in debt selling at 85% of par,$50 million in book value of equity,and $65 million in market value of equity?

• A) 50.00%
• B) 54.18%
• C) 56.55%
• D) 60.47%

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Definitions:

Schemas

Mental structures that people use to organize their knowledge about the social world around themes or subjects and that influence the information people notice, think about, and remember.

Neural Networks

Computational models inspired by the human brain's network of neurons, used in machine learning and artificial intelligence.

Cognitive Development

The process by which individuals acquire and understand knowledge through thought, experience, and the senses, often discussed within various stages across the lifespan.

Neural Interconnections

Refers to the links and connections between neurons in the brain that facilitate communication and signaling pathways.