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

Current assets 2,000,000 Long-term assets 7,000,000 Total assets 9,000,000 Current liabilities 1,000,000 Long-term liabilities 5,000,000 Owners' equity 3,000,000

Salmon Enterprises

Bonds outstanding:

3,000

selling at

$980.00

Common stock outstanding:

260,000

selling at

$23.40

If the after-tax cost of debt is 8.0% for both companies and the cost of equity is 12.00%, which company has the higher WACC?