Barley Corp Has Debt with a Book Value of $19

question 97

Multiple Choice

Barley Corp has debt with a book value of $19 million,currently trading at 90% of book value.It also has book value of equity of $15 million,and 10 million shares of common stock trading at $2.45 per share.What weights should Barley Corp use for debt and equity in calculating its WACC?

• A)0.56,0.44
• B)0.44,0.56
• C)0.41,0.59
• D)0.5,0.5
• E)0.6,0.4

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Definitions:

Melanin

A natural pigment found in most organisms, responsible for the color of skin, hair, and eyes, and protection against UV radiation.

Albinism

A genetic condition marked by the absence of melanin pigment in the skin, hair, and eyes, leading to light pigmentation and vision problems.

Cyanosis

A bluish discoloration of the skin and mucous membranes due to the presence of deoxygenated hemoglobin in blood vessels near the skin surface.

Blood Vessels

Tubular structures that transport blood throughout the body, including arteries, veins, and capillaries.