Book value versus market value components. The CFO of DMI is trying to determine the company's WACC. Brad, a promising MBA, says that the company should use book value to assign the WACC components' percentages. Angela, a long-time employee and experienced financial analyst, says that the company should use market value to assign the components' percentages. The after-tax cost of debt is at 8.2%, the cost of preferred stock is at 12.98%, and the cost of equity is at 16.96%. Calculate the WACC using both the book value and the market value approaches with the information in the popup window: . Which do you think is better? Data Table What is the book value adjusted WACC for DMI? % (Round to two decimal places.) Click on the Icon P in order to copy its content into a spreadsheet. DMI Balance Sheet ($ in thousands) Current assets $33,306 Current liabilities $0 Long-term liabilities Bonds payable Long-term assets $68,694 $62,000 Owners' equity Preferred stock $13,000 Common stock $27,000 Total liabilities and Total assets $102,000 owners' equity $102,000

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.