Assume Lavender Corporation Has a Market Value of $4 Billion

question 67

Multiple Choice

Assume Lavender Corporation has a market value of $4 billion of equity and a market value of $19.8 billion of debt. What are the weights in equity and debt that are used for calculating the WACC?

• A) 0.10, 0.90
• B) 0.832, 0.168
• C) 0.168, 0.832
• D) 0.90, 0.10

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Definitions:

Indifference Curve

A graph depicting combinations of goods that give the consumer equal satisfaction and utility.

Cookies

A small, sweet baked treat that comes in various flavors and can include ingredients like chocolate chips, nuts, or dried fruit.

Brownies

A type of chocolate baked treat, typically in the form of a square or rectangular cake slice.

Normal Good

A good for which demand increases as the income of consumers increases.