Defining capital structure weights

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(Defining Capital Structure Weights) In August of 2009 the capital of the Emerson Electric Corporation (EMR) (measured in book and market values) appeared as follows:

(Thousands of dollars)           Book Values                Market Values

Short-term debt                       $1,211,000                 $1,211,000    

Long-term debt                         11,917,000                11,917,000

Common equity                           9,035,000                26,111,000

Total capital                              $22,163,000                39,239,000

What weights should Emerson use when computing the firm’s weighted average cost of capital?

The appropriate weight of debt, (W)d, is ____ % (round to one decimal place)

The appropriate weight of common equity, (W)cs, is ____ % (round to one decimal place)

Reference no: EM13847545

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