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Promo Pak has compiled the following financial data: Source of Capital Book Value Market Value Cost Long-term debt $10,000,000 $8,500,000 5.0% Preferred stock 1,000,000 1,500,000
Promo Pak has compiled the following financial data:
| Source of Capital | Book Value | Market Value | Cost |
| Long-term debt | $10,000,000 | $8,500,000 | 5.0% |
| Preferred stock | 1,000,000 | 1,500,000 | 14.0 |
| Common stock equity | 9,000,000 | 15,000,000 | 20.0 |
| $20,000,000 | $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.
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Understanding Terrorist Finance
Authors: T. Wittig
2011th Edition
0230291848, 978-0230291843
