medium · Principles of Finance cost-of-capital-structure
An analyst is computing the WACC for a company with 50 million shares trading at $40 each and a book value of equity of $1.2 billion. The firm has $800 million in debt at par, which is also its market value.
What weight should be assigned to equity in the WACC calculation?
- 28.57%
- 83.33%
- 60.00%
- 71.43%
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