Suppose That a Company's Equity Is Currently Selling for $55

question 53

Multiple Choice

Suppose that a company's equity is currently selling for $55 per share and that there are 1 million shares outstanding. If the firm also has 50 thousand bonds outstanding, which are selling at 95 percent of par ($1,000) , what are the firm's current capital structure weights for equity and debt respectively?

• A) 50 percent, 50 percent
• B) 53.66 percent, 46.34 percent
• C) 52.38 percent, 47.62 percent
• D) 36.67 percent, 63.33 percent

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