WACC-Market value weights The market values and after-tax costs of various sources of capital used by Ridge Tool are shown in the following table: a. Calculate the firm's weighted average cost of capital, b. Explain how the firm can use this cost in the investment decision-making process. \begin{tabular}{lrc} \hline Source of capital & Market value & Individual cost \\ \hline Long-term debt & $900,000 & 5.1% \\ Preferred stock & $50,000 & 12.4% \\ Common stock equity & $600,000 & 17.6% \\ \hline \end{tabular}