Given the following data for Golf Corporation:
Market price/share = $12; Book value/share = $10; Number of shares outstanding = 100 million; market price/bond = $800; Face value/bond = $1,000; Number of bonds outstanding
= 1 million; Calculate the proportions of debt (D/V) and equity (E/V) for the firm that you would use for estimating the weighted average cost of capital (WACC):
A) 40% debt and 60% equity
B) 50% debt and 50% equity
C) 45.5% debt and 54.5% equity
D) none of the given values

Question

Quizplus · Accepted Answer

The Answer of Given the following data for Golf Corporation:
Market price/share = $12; Book value/share = $10; Number of shares outstanding = 100 million; market price/bond = $800; Face value/bond = $1,000; Number of bonds outstanding
= 1 million; Calculate the proportions of debt (D/V) and equity (E/V) for the firm that you would use for estimating the weighted average cost of capital (WACC):
A) 40% debt and 60% equity
B) 50% debt and 50% equity
C) 45.5% debt and 54.5% equity
D) none of the given values

Given the Following Data for Golf Corporation