The proportions of the market value of the firm's assets financed via debt, common stock, and...
The proportions of the market value of the firm's assets financed via debt, common stock, and preferred stock are called the firm's _____________________.
q45
Homework Answers
Answer : Capital structure weights
suppose value of assets = 100 and debt = 20, common stock = 50 and preferred stock = 30
then the capital structure weights are : debt = 20/100 =0.20 = 20%, common stock = 50/100 = 0.50 = 50% and preferred stock = 30/100 =0.30 = 30%
Company uses these capital structure weights to find out WACC.
WACC = sum (weights x cost of source of fund) [Thumbs up please]
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