Use the Data Provided on Cadbury to Answer the Question

question 4

Multiple Choice

Use the data provided on Cadbury to answer the question below.The risk free rate is 4.25%.The expected return on the market portfolio is 9.75%.The corporate tax rate is 40%.The face value of Cadbury's outstanding bonds is 2.450 billion pounds sterling.The coupon rate on Cadbury's bonds is 4.5%.Assume that the bonds pay annual coupons.The yield to maturity on Cadbury's bonds is 4.5%.Cadbury's bonds mature in 7 years.Cadbury has 1.650 billion common shares outstanding.The market price of Cadbury's common shares as of Dec 31,2008 is 6.25 pounds sterling.Cadbury's Beta is 0.8.What is the capital structure weight for equity?

• A) 0.149
• B) 0.192
• C) 0.808
• D) 0.851
• E) 0.862

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Civil Rights Movement

A historical movement during the 1950s and 1960s in the United States, aiming to end racial segregation and discrimination against African Americans and secure legal recognition of their rights.

Labor Union Movement

The collective organization of workers formed to protect and advance their rights and interests, often through negotiating wages, work hours, and working conditions.

Mass Protest

A large-scale demonstration or gathering of people, typically expressing opposition to a specific policy, action, or event.

Labor Union

An organized association of workers formed to protect and further their rights and interests.