How do you calculate the weight in the WACC formula? The percentages of the firm's capital that will be financed by each te of financing in terms of book value The percentages of the firm's capital that will be financed by each type of financing in terms of market value the yield to maturity on the existing debt the total market value of the firm's capital the required return on the firm's assets, based on the market's perception of the risk of those assets Burnham Brothers Inc. uses the CAPM to calculate its cost of equity. Which of the following events would REDUCE its cost of equity? The market risk premium declines. The risk free rate remains the same. The market return increases. Expected inflation increases. The company's beta increases. To estimate the company's WACC, Marshall Inc. recently hired you as a consultant. You have obtained the following information. (1) The firm's bonds mature in 20 years, have an 8.00% annual coupon, a par value of $1,000, and a market price of $1,050.00. (2) The company's tax rate is 40%. (3) The risk-free rate is 4.50%, the market return is 10.00%, and the stock's beta is 1.20. (4) The target capital structure consists of 35% debt and the balance is common equity. The firm uses the CAPM to estimate the cost of common stock. What is its WACC? 7.16\% 7.93\% 8.79% 8.35% 7.54%