Book value versus market value components. Compare Trout, Inc. with Salmon Enterprises, using the balance sheet of Trout and the market data of Salmon for the weights in the weighted average cost of capital: .:. If the after-tax cost of debt is 9.4% for both companies and the cost of equity is 15.36%, which company has the higher WACC? What is the book value adjusted WACC for Trout, Inc.? 1% (Round to two decimal places.) Data table Click on the Icon in order to copy its content into a spreadsheet. Trout, Inc. Current assets $3,333,333 Current liabilities: Long-term assets: $11,666,667 Long-term liabilities: Total assets $15,000,000 Owners' equity $1,302,329 $9,554,236 $4,143,435 Salmon Enterprises Bonds outstanding: 3,000 selling at $943.81 Common stock outstanding: 260,000 selling at $34.63 Book value versus market value components. The CFO of DMI is trying to determine the company's WACC. Brad, a promising MBA, says that the company should use book value to assign the WACC components' percentages. Angela, a long-time employee and experienced financial analyst, says that the company should use market value to assign the components' percentages. The after-tax cost of debt is at 9.3%, the cost of preferred stock is at 13.09%, and the cost of equity is at 16.91%. Calculate the WACC using both the book value and the market value approaches with the information in the popup window: Which do you think is better? X Data table What is the book value adjusted WACC for DMI? % (Round to two decimal places.) $0 $57,000 Click on the Icone in order to copy its content into a spreadsheet. DMI Balance Sheet ($ in thousands) Current assets $31,673 Current liabilities Long-term assets $65,327 Long-term liabilities Bonds payable Owners' equity Preferred stock Common stock Total liabilities and Total assets $97,000 owners' equity $13,000 $27,000 $97,000 Click on the Icon in order to copy its content into a spreadsheet. a Market Information Debt Preferred Stock Outstanding 57,000 130,000 Market Price $938.42 $109.94 Common Stock 1,080,000 $37.79