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I don't understand how to find the weight of each source of capital, can you show me how to do that? WACC: Market value weights
I don't understand how to find the weight of each source of capital, can you show me how to do that?
WACC: Market value weights The market values and after-tax costs of various sources of capital used by Ridge Tool are shown in the following table 3 Source of capital Long-term debt Preferred stock Common stock equity Market value $700,000 50,000 650,000 Individual cost 5.3% 12.0 16.0 a. Calculate the firm's WACC b. Explain how the firm can use this cost in the investment decision-making processStep by Step Solution
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