Book value versus market value components. The CFO of DMI is trying to determine the company's WACC. Brad, a promising MBA, says that the company should use book value to assign the WACC components' percentages. Angela, a long-time employee and experienced financial analyst, says that the company should use market value to assign the components' percentages. The after-tax cost of debt is at %, the cost of preferred stock is at %, and the cost of equity is at . Calculate the WACC using both the book value and the market value approaches with the information in the popup window:LOADING.... Which do you think is better?

P11-12 (similar to) Question Help Book value versus market value components. The CFO of DMI is trying to determine the company's WACC. Brad, a promising MBA, says that the company should use book value to assign the WACC components' percentages. Angela, a long-time employee and experienced financial analyst, says that the company should use market value to assign the components' percentages. The after-tax cost of debt is at 7.4%, the cost of preferred stock is at 11.63%, and the cost of equity is at 16.09%. Calculate the WACC using both the book value and the market value approaches with the information in the popup window: 3. Which do you think is better? What is the book value adjusted WACC for DMI? % (Round to two decimal places.) Data Table $0 $54,000 Click on the Icon in order to copy its content into a spreadsheet. DMI Balance Sheet ($ in thousands) Current assets $31,347 Current liabilities Long-term assets $64,653 Long-term liabilities Bonds payable Owners' equity Preferred stock Common stock Total liabilities and Total assets $96,000 owners' equity $14,000 $28,000 $96,000 Click on the Icon in order to copy its content into a spreadsheet. Market Information Debt Preferred Stock Common Stock Outstanding Market Price 54,000 $1,034.88 140,000 $109.16 1,120,000 $32.74 Print Done