The total market value of General Motors (GM) is $10 billion. GM has a market value of $4 billion of equity and a face value of $14 billion of debt. What are the weights in equity and debt that are used for calculating the WACC? A. 0.6, 0.4 B. 0.2, 0.8 C. 0.4, 0.6 D. cannot be determined
The total market value of General Motors (GM) is $10 billion. GM has a market value of $4 billion of equity and a face value of $14 billion of debt. What are the weights in equity and debt that are used for calculating the WACC? A. 0.6, 0.4 B. 0.2, 0.8 C. 0.4, 0.6 D. cannot be determined
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Transcribed Image Text:The total market value of General Motors (GM) is $10 billion. GM has a market value of $4 billion of equity and a face value of $14 billion of debt. What are the weights in equity and debt that are used for calculating the
WACC?
A. 0.6, 0.4
B. 0.2, 0.8
C. 0.4, 0.6
D. cannot be determined
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