12. (Weighted average cost of capital-weights) A company has the following right-hand side of its bal- ance sheet: $250,000 100,000 400,000 $750,000 15 Bonds payable Preferred stock (1000 shares) Common stock (200,000 shares) Total Liabilities + Equity Bonds payable are currently priced at 115 (115% of face value) in the market, preferred stock is selling at $70 per share, and common stock is selling at $20 per share. Management has announced that it is targeting a capital structure composed of 65% debt and 35% equity. Of the equity, 10% is to be preferred stock, with the remainder common stock. Calculate the weights to be used in the weighted average cost of capital calculation if the weights are based on: a. The company's book values b. The company's market values c. Management's target capital structure d. If management's target weights were not known, which of the other two weighting schemes would you use? Why? 16.10 pa alculation) A