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Promo Pak has compiled the following financial data: Source of Capital Long-term debt Preferred stock Cost 5.0% 140 20.0 Book Value Market Value $10,000,000 $8,500,000
Promo Pak has compiled the following financial data: Source of Capital Long-term debt Preferred stock Cost 5.0% 140 20.0 Book Value Market Value $10,000,000 $8,500,000 1,500,000 Common stock equity9,000,000 15,000,000 $20,000,000 $25,000,000 1,000,000 (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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