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Suppose That a Company's Equity Is Currently Selling for $30

Question 64

Multiple Choice

Suppose that a company's equity is currently selling for $30 per share and that there are 5 million shares outstanding. If the firm also has 20 thousand bonds outstanding, which are selling at 98 percent of par ($1,000) , what are the firm's current capital structure weights for equity and debt respectively?


A) 50%, 50%
B) 88.44%, 11.56%
C) 99.60%, 0.40%
D) 88.23%, 11.77%

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