contestada

Assume Lavender Corporation has a market value of $4 billion of equity and a market value of $19.8 billion of debt. What are the weights in equity and debt that are used for calculating the WACC?

Respuesta :

Answer:

Debt = 83.19%

Equity  = 16.81%

Explanation:

Given that

Market value of the equity = $4 billion

Market value of debt = $19.8 billion

Total firm capital would be

= Market value of the equity + Market value of the debt

= $4 billion + $19.8 billion

= $23.8 billion

So, the weightage of debt would be

= Market value of debt ÷ Total firm capital

= $19.8 billion ÷ $23.8 billion

= 83.19%

And, the weightage of equity is

= Market value of equity ÷ Total firm capital

= $4 billion ÷ $23.8 billion

= 16.81%

Otras preguntas