
Explanation:
To determine the weight of equity (We) in the WACC calculation, we use the formula:
where is the weight of debt, calculated as:
Given the debt-to-equity ratio (D/E) of 0.5:
Thus, the weight of equity is:
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.
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