Sapp Trucking s balance sheet shows a total of noncallable $ 4 5 million long - term
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Question:
Sapp Truckings balance sheet shows a total of noncallable $ million longterm debt with a coupon rate of and a yield to maturity of This debt currently has a market value of $ million. The balance sheet also shows that the company has million shares of common stock, and the book value of the common equity common stock plus retained earnings is $ million. The current stock price is $ per share; stockholders' required return, rs is ; and the firm's tax rate is The CFO thinks the WACC should be based on market value weights, but the president thinks book weights are more appropriate. What is the difference between these two WACCs?
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