Fancy Foods has compiled the following financial data:

Source of Capital Book Value Market Value Cost

Long-term debt $12,000,000 $14,400,000 6.0%

Preferred stock 3,000,000 3,600,000 12.0

Common stock equity 10,000,000 18,000,000 18.0

------------ ------------

$25,000,000 $36,000,000

a. Calculate the weighted average cost of capital using book value weights.

b. Calculate the weighted average cost of capital using market value weights.

*Please calculate in Excel if you can. Thank you in advance! :)