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WACCBook weights and market weights Webster Company has compiled the information shown in the following table: a. Calculate the weighted average cost of capital using
WACCBook 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. a. The firm's weighted average cost of capital using book value weights is %. (Round to two decimal places.) x Data Table - (Click on the icon here e 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 $4,200,000 9% Preferred stock 40,000 62,000 11% Common stock equity 1,060,000 4,823,000 15% Totals $5,100,000 $9,085,000 Print Done
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