单选题

Which of the following is the least appropriate method for an external analyst to estimate a company’s target capital structure for determining WACC? Using the:

A、 averages of comparable companies’ capital structure.
B、 company’s current capital structure, at book value weights.
C、 statements made by the company’s management regarding capital structure policy.

【正确答案】 B

【答案解析】

B is correct. An external analyst does not know a company’s actual target capital structure.
Consequently, the analyst should rely on market value (not book value) weights for the components of the company’s current capital structure.
Questions 79 through 90 relate to Equity Investments.