Find out the WACC based on book values

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Reference no: EM132850583

Question - XYZ Industries has three sources of capital - the equity shares, preference shares and straight debt, costing 18%, 15% and 7% respectively. The proportions of different kinds of capital as reflected in the balance sheet and as per the market values are as under:

Proportions	Capital Book value	Market value
Equity	75%	65%
Preference	10%	15%
Debt	15%	20%

Required - Find out the WACC based on a) book values b) market values and comment on WACC.

Reference no: EM132850583

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