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Assume JUP Has Debt with a Book Value of $20

Question 21

Multiple Choice

Assume JUP has debt with a book value of $20 million,trading at 120% of par value.The firm has book equity of $20 million,and 2 million shares trading at $18 per share.What weights should JUP use in calculating its WACC?


A) 40% for debt,60% for equity
B) 50% for debt,50% for equity
C) 36% for debt,64%% for equity
D) 45% for debt,55% for equity
E) 30% for debt,70% for equity

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