Zonk Corp.
The following data pertains to Zonk Corp., a manufacturer of ball bearings (dollar amounts in millions):
$\begin{array}{l}
\begin{array} { l }
\text { Tatal assets } \
\text { Interest-bearing debt } \
\text { Average pre-tax borrowring } \
\text { Cammon equity: } \
\text { Badk value } \
\text { Market value } \
\text { Incame tax rate } \
\text { Market equity beta }
\end{array}
\begin{array} { r }
\$ 7460\
\$ 3652\
10.5 \%\
\
\$2950 \
\$13685 \
35\% \
1.13
\end{array}
\end{array}$
-Determine the weight on equity capital that should be used to calculate Zonk's weighted-average cost of capital:
A) 79.00%
B) 78.3%
C) 41.8%
D) 50%

Question

Zonk Corp.
The following data pertains to Zonk Corp., a manufacturer of ball bearings (dollar amounts in millions):
 $\begin{array}{l}
\begin{array} { l } 
\text { Tatal assets } \
\text { Interest-bearing debt } \
\text { Average pre-tax borrowring } \
\text { Cammon equity: } \
\text { Badk value } \
\text { Market value } \
\text { Incame tax rate } \
\text { Market equity beta }
\end{array}
\begin{array} { r } 
 \$ 7460\
\$ 3652\
10.5 \%\
\
\$2950 \
\$13685 \
35\% \
1.13
\end{array}
\end{array}$
-Determine the weight on equity capital that should be used to calculate Zonk's weighted-average cost of capital:
A) 79.00%
B) 78.3%
C) 41.8%
D) 50%

Quizplus · Accepted Answer

$\begin{array}{lccc}
  \text {Debt} &\$ 3652 & 21.00 \% \
  \text { Market Value of Equity } &\underline {13.685 }&\underline {79.00\%}\
  \text { Total } &\$ 17.337&100 \%\
\end{array}$

Zonk Corp the Following Data Pertains to Zonk Corp -Determine the Weight on Equity Capital That Should Be Used

Zonk Corp
the Following Data Pertains to Zonk Corp -Determine the Weight on Equity Capital That Should Be Used