The capital structure weights which are used to compute a firm's weighted average cost of capital are based on the:
A) Relative book values of the firm's debt and equity.
B) Total face value of the outstanding debt and the book value of the firm's equity.
C) Total face value of the outstanding debt and the market value of the firm's equity.
D) Market value of both the firm's debt and its equity.
E) Historical average debt-equity ratio of the firm.
Correct Answer:
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