Final answer:
The weight of equity in the firm's WACC calculation is found by dividing the market capitalization of $14 billion by the total value of the firm ($14 billion + $11 billion = $25 billion), resulting in a weight of 0.56 or 56%.
Step-by-step explanation:
To calculate the weight of equity in the firm's weighted average cost of capital (WACC) calculation, you need to take into account both the market capitalization and the net debt.
The market capitalization, also known as market value of equity, is $14 billion, and the net debt is $11 billion. The total value of the firm, therefore, is the sum of these two figures, which amounts to $25 billion ($14 billion equity + $11 billion debt).
The weight of equity in the WACC is calculated by dividing the market capitalization by the total value of the firm. Thus, the weight of equity would be $14 billion divided by $25 billion, giving a result of 0.56 or 56%. This figure represents the proportion of the firm's financing that comes from equity.