Firstly… sorry for asking this question the millionth time (I assume it has been asked and my inability to find the answer high)
Given…
MV Equity : 100
BV Equity : 75
BV Debt: 40
MV Debt: Not Given, not implied, nothing…
To calculate the weights, do we use
BV(E)/ BV(E) + BV(D) -> assumption that book values must be compared to book values (like for like) ?
or …
MV(E) / (MV(E) + BV(D) -> mix and match… use the Market value for equity but the BOOK value for debt (since we dont have market)
Thank You!
