Answered step by step
Verified Expert Solution
Question
1 Approved Answer
19 of 30 A company has a marke value of equity divided by book value of equity that is greater than 1.0. If this company
19 of 30 A company has a marke value of equity divided by book value of equity that is greater than 1.0. If this company uses book value of equity to determine their WACC, they will derive a value that is the market based WACC. Because . Less than the ratio of debt to equity will be less than if the ratio was based on market values. Ob Less than, the ratio of debt to equity will be greater than if the ratio was based on market values. Greater than; the ratio of debt to equity will be less than if the ratio was based on market values. Od Greater than; the ratio of debt to equity will be greater than if the ratio was based on market values. o e. Equivalent to; the ratio of debt to equity is the same whether book values or market values are used. Oc. Unsure
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started