What is the appropriate debt ratio to use

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Question: Corp. has 4 million shares of common stock outstanding at a book value of $4 per share. The stock trades for $2.00 per share. It also has $5 million in face value of debt that trades at 85% of par. What is the appropriate debt ratio (D/(D+E)) to use for calculating Company X's weighted-average cost of capital?

Reference no: EM131962710

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