Answer: 0.67.

To determine the weight of equity (We) in the WACC calculation, we use the formula: \[ We = 1 - Wd \] where \( Wd \) is the weight of debt, calculated as: \[ Wd = \frac{D/E}{1 + D/E} \] Given the debt-to-equity ratio (D/E) of 0.5: \[ Wd = \frac{0.5}{1 + 0.5} = 0.333 \] Thus, the weight of equity is: \[ We = 1 - 0.333 = 0.667 \approx 0.67 \] Option A (0.33) is incorrect as it represents the weight of debt, not equity. Option B (0.50) is incorrect as it reflects the debt-to-equity ratio, not the weight of equity.

Author: LeetQuiz Editorial Team