Given Are the Following Data for Vinyard Corporation

question 29

Multiple Choice

Given are the following data for Vinyard Corporation: $\begin{array}{c|c}\text { Vinyard Corporation }& \text { Liquidating values, \$Millions) }\\\hline\text { Asset Value }\$ 1.500 &\$ 750 \text { Debt }\\--- & \$ 750 \text { Equity }\\\$ 1.500 &\$ 1.500\end{array}$ \begin{array}{c|c}\text { Vinyard Corporation }&\text { (Book values, \$Millions) }\\\hline\text { Asset Value }\$ 2,500 & \$ 1.000 \text { Debt }\\--- & \$ 1.500\text { Equity }\\\\$ 2,500&\$ 2.500\end{array} \begin{array}{c|c}\text { Vinyard Corporation }&\text { (Market values, \$Millions) }\\\hline\text { Asset Value }\$ 4.000 & \$ 1.000 \text { Debt }\\--- & \$ 3.000\text { Equity }\\\\$ 4.000 & \$ 4.000\end{array} $\begin{array}{c|c}\text { Vinyard Corporation }& \text { Liquidating values, \$Millions) }\\\hline\text { Asset Value }\$ 1.500 &\$ 750 \text { Debt }\\--- & \$ 750 \text { Equity }\\\$ 1.500 &\$ 1.500\end{array}$ Calculate the proportions of debt (D/V) and equity (E/V) that you would use for estimating Vinyard's weighted average cost of capital (WACC) .

• A)40 percent debt and 60 percent equity
• B)50 percent debt and 50 percent equity
• C)25 percent debt and 75 percent equity
• D)75 percent debt and 25 percent equity

---

Definitions:

Organisations

Structured groups of people who come together to achieve specific goals, characterized by having systems of governance and processes.

Units

A measure of quantity or amount, used in various contexts such as manufacturing, accounting, or academic grading.

Teams

Groups of individuals working collaboratively towards a common goal or objective.

Departments

Subsections within an organization, each specializing in a particular area of operation or function.