Umpare harket value weights. the answers obtained in parts a and b. P9-15 Explain the differences WACC and target weights Aft that its optimal capital structure is composed of the sources a weights shown in the following table. ercareful analysis, Dexter Brothers has determined Target market value weight Source of capital Long-term debt Preferred stock Common stock equity 30% 15 Total The cost of debt is 4.2%, the cost of preferred stock is 9.5%, the cost of retained earn- ings is 13.0%, and the cost of new common stock is 15.0%. All are after-tax rates The company's debt represents 25%, the preferred stock repre common stock equity represents 65% of total capital on the basis of the current mar- sents 10%, and the of retained earnings available and does not expect to sell any new common stock a. Calculate the WACC on the basis of historical market value weights. b. Calculate the WACC on the basis of target market value weights c. Compare the answers obtained in parts a and b. Explain the differences