Question
Assume JBH has debt with a book value of $20 million, trading at 120% of par value. The firm has book equity of $20 million,
Assume JBH has debt with a book value of $20 million, trading at 120% of par value. The firm has book equity of $20 million, and 2 million shares trading at $18 per share. What weights should JBH use in calculating its WACC?
| A. | 36% for debt, 64%% for equity | |
| B. | 45% for debt, 55% for equity
| |
| C. | 40% for debt, 60% for equity
| |
| D. | 50% for debt, 50% for equity
|
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Financial and Management Accounting
Authors: Pauline Weetman
7th edition
1292086599, 978-1292086590
