Difference of wacc based on market value

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Please show formulas.A balance sheet shows a total of noncallable $45 million. Long-termdebt with a coupon rate of 7.00% and a yield to maturity of 6.00%. This debt currently has a market value of $50 million. The balance sheet also shows that the company has 10 million shares of common stock, and the book value of thecommon equity (common stock plus retained earnings) is $65 million.The currentstock price is $22.50 per share; stockholdersrequired return, rs, is 14.00%; and thefirm's tax rate is 40%.

What is the difference ofWACC based on market value weights andbook weights?

Reference no: EM13197436

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