Book value versus market value components. Compare Trout Inc. with Salmon Enterprises using the balance sheet of Trout and the market data of Salmon for the weights in the weighted average cost of capital.

Trout Inc.

Current Assets: $2,444,444

Current Liabilities: $1,470,435

Long-term Assets: $8,555,556

Long-Term Liabilities: $6,326,083

Total Assets $11,000,000

Owners Equity: $3,203,482

Salmon Enterprises Bonds Outstanding 3,000 selling at $1029.12 Common Stock Outstanding 260,000 selling at $27.39 If the after-tax cost of debt is 10.7% for both companies and the cost of equity is 16.11%

1. Which company has the highest WACC?

2. What is the book value adjusted WACC for Trout Inc?

3. What is the market value adjusted WACC for Salmon Ent?