a firm has a market capitalization (market value of equity) id $ 18 billion and net debt of $ 3 billion. Calculate the weight of debt in the firm's weighted average cost of capital (WACC) calculation.
ANSWER :
C = E + D = 18 + 3 = 21 billion dollars.
Weight of debt in the capital = D/C = 3 / 21 = 0.1429 = 14.29% (ANSWER).
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