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 10.6%, for both companies and the cost of equity is 14.64% which company has the higher WACC?

What is the book value adjusted WACC for Trout, Inc.?

____%

What is the market value adjusted WACC for Salmon Enterprises?

____%

Which company has the higher WACC?

A. Salmon Enterprises has a higher WACC at ___ than Trout, Inc. with a WACC of ___

B. Trout, Inc. has a higher WACC at ___ than Salmon Enterprises with a WACC of ___

Trout, Inc.
Current assets:	$2,000,000	Current liabilities:	$641,787
Long-term assets:	$7,000,000	Long-term liabilities:	$5,404,949
Total assets:	$9,000,000	Owners' equity:	$2,953,264
Salmon Enterprises
Bonds outstanding:3,000 selling at 928.39
Common stock outstanding:260,000 selling at $30.53