Timbuktu Corp Has a Market Value of Debt of $2

question 103

Multiple Choice

Timbuktu Corp has a market value of debt of $2.5 billion,and a market value of equity of $1.5 billion.What weights should Timbuktu use for debt and equity in calculating its WACC?

• A)0.375,0.625
• B)0.5,0.5
• C)0.4,0.6
• D)0.625,0.375
• E)0.6,0.4

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Definitions:

Zooxanthellae

Microscopic algae that live symbiotically within the cells of coral and other marine organisms, providing them with nutrients through photosynthesis.

Shoreline

Denotes the edge or boundary where a body of water meets the land, often affected by natural phenomena like tides and erosion as well as human activities.

Continental Shelf

The extended perimeter of each continent that lies under the ocean and stretches from the coastline to a sharp drop-off into the deep ocean floor.

Summer

Summer is one of the four temperate seasons, characterized by warmer weather, longer days, and typically occurs between spring and autumn.