The balance sheet also shows that the company has 10

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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 current stock price is $22.50 per share; stockholders required return, rs, is 14.00%; and the firm's tax rate is 40%. What is the difference of WACC based on market value weights and book weights?

Reference no: EM13478937

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