Ok. Can’t figure out how they are getting the the Debt and Equity weights being used to solve for WACC. This is from the blue box problem in Elan Equity book Section Free Cash Flow Valuation pg. 21. Information given is:

Target debt to equity: 0.4

# of common share: 300mm

MV of debt: 1.2billion

The weights they are using to calculate WACC are (0.4/1.4) for debt and (1/1.4) for equity.

Anyone know how they are calculating the weights? Can’t for the life of me figure it out.