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The Capital Structure Weights Used in Computing the Weighted Average

Question 95

Multiple Choice

The capital structure weights used in computing the weighted average cost of capital are:


A) constant over time provided that the debt-equity ratio changes in unison with the market values.
B) based on the face value of the firm's debt.
C) computed using the book value of the long-term debt and the shareholder's equity.
D) based on the market value of the firm's debt and equity securities.
E) limited to the firm's debt and common stock.

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