Question $7,$ B$11-11($static$)$

HW Score: $76\mathrm{.}67\%,15\mathrm{.}33$ of $20$ points

Homework

Part $1$ of $3$

Points: $0$ of $2$

Book value versus market value components. Compare Trout, Inc. with Salmon Enterprises, using the following 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 $8\mathrm{.}0$ or both companies and the cost of equity is $12\mathrm{.}00\%$ shich company has the higher WACC?

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

$\%($Round to two decimal places.$)$

Data table

$\backslash$table$[[\backslash$table$[[$Click on the Icon by in order to copy its content int, a spreadsheet.$],[$Trout$,$ Inc.$]]],[$Current assets:,$$2,000,000,$Current liabilities:,$$1,000,000,],[$Long$-$term assets:,$$7,000,000,$Long$-$term liabilities:,$$5,000,000,],[$Total assets:,$$9,000,000,$Owners' equity:,$$3,000,000,],[$Salmon Enterprises$],[$Bonds outstanding: $3,000$ selling at $$980\mathrm{.}00$