Question: The capital structure weights which are used to compute a firm's weighted average cost of capital are based on the: Multiple Choice Relative book values

The capital structure weights which are used to compute a firm's weighted average cost of capital are based on the:

Multiple Choice

  • Relative book values of the firm's debt and equity.

  • Total face value of the outstanding debt and the book value of the firm's equity.

  • Total face value of the outstanding debt and the market value of the firm's equity.

  • Market value of both the firm's debt and its equity.

  • Historical average debt-equity ratio of the firm.

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