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Question 23) Bad Experience Airlines has $15,000,000 of bonds outstanding selling for 105 percent of its face value. (4 Points) This is the only debt
Question 23) Bad Experience Airlines has $15,000,000 of bonds outstanding selling for 105 percent of its face value. (4 Points) This is the only debt the firm has on its balance sheet. Along with the bond, the firm has 1,000,000 shares outstanding valued at $25 a share. What weight should be given to the debt and to the equity when the company computes its weighted average cost of capital? Market Value of Common Debt (D) Market Value Common Equity (E) Market Value Assets (V) Weight Debt (W) Weight Common Equity (We)
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