Company X Has 2 Million Shares of Common Stock Outstanding

Multiple Choice

Company X has 2 million shares of common stock outstanding at a book value of $2 per share.The stock trades for $3.00 per share.It also has $2 million in face value of debt that trades at 90% of par.What is the appropriate debt ratio (D/(D+E) ) to use for calculating Company X's weighted-average cost of capital?

A) 23.1%
B) 25.0%
C) 31.0%
D) 33.3%