Promo Pak has compiled the following financial data;

Long term debt Book value: 10 000 000 Market Value 8 500 000 Cost 5.0%

Preferred Stock Book Value 1 000 000 Market Value 1 500 000 Cost 14.0%

Common Stock Equity Book Value9 000 000 Market Value 15 000 000 Cost 20.%

Totals (Book value) 20 000 000

Market Value 25 000 000

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

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