Assume JUP Has Debt with a Book Value of $20

question 31

Multiple Choice

Assume JUP has debt with a book value of $20 million,trading at 120% of par value.The firm has book equity of $20 million,and 2 million shares trading at $18 per share.What weights should JUP use in calculating its WACC?

• A)40% for debt,60% for equity
• B)50% for debt,50% for equity
• C)36% for debt,64%% for equity
• D)45% for debt,55% for equity
• E)30% for debt,70% for equity

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