Question: Why do we use market-based weights instead of book-value-based weights when computing the WACC?

Why do we use market-based weights instead of book-value-based weights when computing the WACC?

Step by Step Solution

3.57 Rating (164 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock

We use marketbased rather than bookvaluebased weights because we are interested in determining wh... View full answer

blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Document Format (1 attachment)

Word file Icon

335-B-F-F-M (4354).docx

120 KBs Word File

Students Have Also Explored These Related Finance Questions!