Which is the correct WACC to use for project evaluation?

• Target weights

• Book weights

• Market weights

Williams, Inc., has compiled the following information on its financing costs: Type of Book Value Market Value Cost Financing Short-term debt $ 15,000,000 $ 14,000.000 4.2% Long-term debt 42,500,000 36,500,000 7.3 Common stock 12,000,000 99,000,000 13.1 Total $69,500,000 $149,500,000 The company is in the 25 percent tax bracket and has a target debt-equity ratio of 70 percent. The target short-term debt/long-term debt ratio is 10 percent. a. What is the company's weighted average cost of capital using book value weights? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What is the company's weighted average cost of capital using market value weights? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) c. What is the company's weighted average cost of capital using target capital structure weights? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a. Weighted average cost of capital b. Weighted average cost of capital Weighted average cost of capital