Assume JUP has debt with a book value of $24 million, trading at 120% of par value. The firm has book equity of $28 million, and 2 million shares trading at $20 per share. What weights should JUP use in calculating its WACC?
A) 41.86% for debt, 58.14% for equity
B) 37.67% for debt, 62.33% for equity
C) 33.49% for debt, 66.51% for equity
D) 29.30% for debt, 70.70% for equity
Answer: A
Business
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