Based solely on their current weighted average cost of capital, which company should pursue an investment...

  

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Based solely on their current weighted average cost of capital, which company should pursue an investment opportunity with an expected return of 5.5%? Company A Company B Market Value of Equity $350,000 $150,000 Market Value of Debt $100,000 $150,000 Cost of Equity 9% 10% Cost of Debt 1.5% 2% Tax Rate 30% 25% Based solely on their current weighted average cost of capital, which company should pursue an investment opportunity with an expected return of 5.5%? Company A Company B Market Value of Equity $350,000 $150,000 Market Value of Debt $100,000 $150,000 Cost of Equity 9% 10% Cost of Debt 1.5% 2% Tax Rate 30% 25%