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WACC-Book weights Ridge Tool has on its books the amounts and specific (after-tax) costs shown in the following table for each source of capital a. Calculate the firm's weighted average cost of capital using book value weights. b. Explain how the firm can use this cost in the investment decision-making process. a. The firm's weighted average cost of capital, using book value weights is 0% (Round to two decimal places.) b. Explain how the firm can use this cost in the investment decision-making process. (Select the best answer below) O A. The WACC is the rate of return that the firm must not exceed on long-term projects to maintain the value of the firm. The cost of capital can be compared to the return for a project to determine whether the project is acceptable. OB. The WACC is the rate of return that the firm must receive on long-term projects to maintain the value of the firm. The cost of capital can be compared to the retum for a project to determine whether the project is acceptable. OC. The WACC is the rate of return that the firm must exceed on long-term projects to maintain the value of the firm The cost of capital can be compared to the dollar value for a project to determine whether the project is acceptable. OD. The WACC is the rate of return that the firm must receive on short-term projects to maintain the value of the firm. The cost of capital can be compared to the dollar value for a project to determine whether the project is acceptable. Data Table (Click on the loon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) Book value Source of capital Long-term debt Individual cost 6.4% 9.1% $950,000 $60,000 $500,000 Preferred stock Common stock equity 14.4% Print Done