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A firm has 4 million common shares outstanding which are currently trading at $15 per share. The firm also has $40 million in outstanding debt.
A firm has 4 million common shares outstanding which are currently trading at $15 per share. The firm also has $40 million in outstanding debt. What are the percentage weights for each source of capital for the firm? a) Equity = 50%; Debt = 50% b) Equity = 60%: Debt = 40% c) Equity = 40%; Debt = 40%; Preferred Equity = 20% d) Equity = 40%; Debt = 60% e) Equity = 50%; Debt = 40%; Preferred Equity = 10%
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