The market values and after - tax costs of various sources of capital used by Ridge Tool
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Question:
The market values and aftertax costs of various sources of capital used by Ridge Tool are shown in the following table.
Source of capital Market value Individual cost
Longterm debt $
Preferred stock
Common stock equity
a Calculate the firms WACC.
b Explain how the firm can use this cost in the investment decisionmaking process.
Please show your work.
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