Using Market Cap in D/E weights for WACC and Beta Calculations
Why does the Street use E = market value of the firm's equity (Market Cap) for the D/E weights in the calculation of WACC and beta (unlevering and relevering), not book value of equity?
I understand that for debt, we simply use what's recorded in book since we assume market value and book value of debt are similar.
Please correct me if I am wrong.
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