A company has a market-to-book ratio that is greater than 1.0. If this company uses book values to determine its WACC, it will derive a value that is ________ the market based WACC because ________

Question 13 options:

	Greater than; the ratio of debt to equity will be greater than if the ratio was based on market values.
	Equivalent to; the ratio of debt to equity is the same whether book values or market values are used.
	Greater than; the ratio of debt to equity will be less than if the ratio was based on market values.
	Less than; the ratio of debt to equity will be less than if the ratio was based on market values.
	Less than; the ratio of debt to equity will be greater than if the ratio was based on market values.