A Company Has a Book Value of $8 Billion of Equity

question 70

Multiple Choice

A company has a book value of $8 billion of equity and a face value of $12 billion of debt. What are the weights in debt and equity that are used for calculating the WACC?

• A)0.6, 0.4
• B)0.4, 0.6
• C)0.5, 0.5
• D)cannot be determined

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Definitions:

Unemployed

A term describing individuals who are capable of working, actively seeking work, but unable to find a job.

Full Employment

A situation in which all available labor resources are being used in the most efficient way possible, implying minimal involuntary unemployment.

Economic Goal

Objectives that societies or governments aim to achieve to ensure long-term sustainable prosperity.

Full Employment

A situation in an economy where all available labor resources are being used in the most efficient way possible, typically with low unemployment.