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Sapp Trucking's balance sheet shows a total of noncallable $45 million long-term debt with a coupon rate of 7.00% and a yield to maturity of

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Sapp Trucking's balance sheet shows a total of noncallable \$45 million long-term debt with a coupon rate of 7.00% and a yield to maturity of 4.06%. This debt currently has a market value of $50 million. The balance sheet also shows that the company has 10 million shares of common stock, and the book value of the common equity (common stock plus retained earnings) is \$55 million. The current stock price is $20 per share stockholders required return, r. is 18.93%; and the firm's tax rate is 40%. The CFO thinks the WACC should be based on market value weights, but the idiot president thinks book weights are more appropriate. What is the difference between these two WACCs

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