Given are 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 Golf Corporation that you should use for estimating its 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) 66.7% debt and 33.3% equity.
Correct Answer:
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