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. %. (Round to two decimal places.) a. The firm's weighted average cost of capital, ra, using market value weights is i Data Table (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) Source of capital Individual cost Market value $700,000 $30,000 Long-term debt 5.2% Preferred stock 11.2% Common stock equity $450,000 15.1% Done Print