Using market value and book value (separately), find the adjusted WACC, using 30% tax rate. Component Balance Sheet Value Market Value Cost of Capital TAX Debt 5,000,000.00 6,850,000.00 8% 30% Preferred Stock 4,000,000.00 2,200,000.00 10% Common Stock 2,000,000.00 5,600,000.00 13% ANSWER Book Value Weights Market Value Weights Adjusted WACC Debt Debt Market Value Preferred Stock Preferred Stock Book Value Common Stock Common Stock