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Sapp Trucking's balance sheet shows a total of noncallable $60 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 $60 million long-term debt with a coupon rate of 7.00% and a yield to maturity of 6.00%. This debt currently has a market value of $65 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 $95 million. The current stock price is $25.50 per share; stockholders' required return, te is 14.00% and the firm's tax rate is 25%. The CFO thinks the WACC should be based on market value weights, but the president thinks book weights are more appropriate. What is the difference between these two WACCS? 1.0.834 O b. 1.754 O c. 1.47 d. 1.29% e. 1.10%

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