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write out clear steps so i know how you got the answer Book value versus market value components. The CFO of DMI is trying to
write out clear steps so i know how you got the answer
Book value versus market value components. The CFO of DMI is trying to determine the company's WACC Brad, a promising MBA, says that the company should use book value to assign the WACC components' percentages. Angela, a long-time employee and experienced financial analyst, says that the company should use market value to assign the components' percentages. The after-tax cost of debt is at 10.6%, the cost of preferred stock is at 14.04%, and the cost of equity is at 17:28% Calculate the WACC using both the book value and the market value approaches with the information in the popup window Which do you think is better? What is the book value adjusted WACC for DMI? % (Round to two decimal places) Click on the Icon in order to copy its content into a spreadsheet. DMI Balance Sheet ($ in thousands) Current assets $32,000 Current liabilities Long-term assets $66,000 Long-term liabilities Bonds payable Owners' equity Preferred stock Common stock Total liabilities and Total assets $98,000 owners' equity Click on the Icon in order to copy its content into a spreadsheet Market Information Debt Preferred Stock Outstanding 59.000 140,000 Market Price $1,086.49 $101.55 8 Common Stock 1,000,000 $31.76 $0 $59,000 $14,000 $25,000 $98,000 Step by Step Solution
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