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WACC-Book weights and market weights Webster Company has compiled the information shown in the following table: a. Calculate the weighted average cost of capital using
WACC-Book weights and market weights Webster Company has compiled the information shown in the following table: a. Calculate the weighted average cost of capital using book value weights. b. Calculate the weighted average cost of capital using market value weights. c. Compare the answers obtained in parts a and b. Explain the differences. i Data Table - X Wo decimal places.) (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) Source of capital Book value Market value After-tax cost Long-term debt $4,000,000 $4,040,000 8% Preferred stock 40,000 58,000 13% Common stock equity 1,060,000 4,717,000 16% Totals $5,100,000 $8,815,000
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