Deighton Industries has 200000 bonds outstanding. The par value of each corporate bond is $1000, and the current market price of the bonds is $965. Deighton also has 6 million common shares outstanding, with a book value of $35 per share and a market price of $28 per share. At a recent board of directors meeting, Deighton board members decided not to change the company’s capital structure in a material way for the future. To calculate the weighted average cost of Deighton’s capital, what weights should be assigned to debt and to equity Debt Equity ()①A. 56.55% 43.45% ②B. 48.85% 51.15% ③C. 53.46% 46.54%
A. ①
B. ②
C. ③
参考答案:C
解析:
In order to calculate the weighted average cost of capital (WACC) , market value weights should be used. The weight of debt would be: 193000000 / 361000000 =0.5346 =53.46% The weight of common stock would be: 168000000/361000000 =0.4654 =46.54%