Hei !! if in case the debt-to-equity ratio of a firm is 1.0 how is its debt-to-value ? i get it 11% and then 89% equity but i am gettin the WACC calculation wrong can u pls help me with this ?
debt to equity of 1 meanings you have 1 unit of debt to every 1 unit of equity, so in total you have 2 units of capital, 1 is debt, 1 is equity, so the weight of debt and equity is both 0.5
tks … but if in case if the debt-to-value is .03 … then its 3 units of debt to every 10 units of equity(1), so we get debt to value of 3/(3+10)= 23% right ?
ya, assuming you meant 0.3 rather than .03…
lol … not my fault its 2:24 in the morning here in norway so … kinda sleepy anyway thank u so much and good luck with ur practice