Use for the debt in order to compute the firm wacc

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1. A company has 1,000,000 shares of common stock outstanding and its stock is currently trading at $50 per share. The firm also has 20,000 bonds outstanding. The bonds are quoted at 116%(?) of face value. What weight should we use for the debt in order to compute the firm's WACC?

a. 27.5%

b. 31.7%

c. 29.2%

d. 33.9%

e. 36.3%

2. Why does Shapiro argue that board members should not be outsiders?

A-Outsiders would be easily manipulated by the CEO

B-Outsiders would be more impartial

C- Outsiders might sell the company out to another company

D- Outsiders might have conflicts of interest

Reference no: EM131931883

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