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When estimating the weighted average cost of capital (WACC) for a firm you could use market or book values to determine the appropriate weights of
When estimating the weighted average cost of capital (WACC) for a firm you could use market or book values to determine the appropriate weights of debt and equity. What are the strengths and weaknesses of using market values? Of using book values? Is the WACC always the most appropriate rate to use when discounting cash flows? Please explain.
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