Electronics Galore has 950,000 shares of ordinary equity outstanding at a market price of 38 a share. The company also has 40,000 bonds outstanding that are quoted at 106 per cent of face value. What weight should be given to the debt when the firm computes its weighted average cost of capital?

Multiple Choice

a)58 per cent

b)42 per cent

c)54 per cent

d)50 per cent

e)46 per cent