Why Do We Use Market Values Rather Than Book Values

question 71

Essay

Why do we use market values rather than book values in calculation of WACC?

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Definitions:

Cash Disbursements

The actual money or cash outflows paid out by a business, typically recorded in a cash disbursement journal.

Merchandise Purchases

The acquisition of goods for sale, usually finished goods, by a retail or wholesale business.

Budgeted Cost

An estimate of the financial cost for items, production, or projects planned in the future.

Raw Material Purchases

The total cost of all raw materials bought by a company for use in production over a specific period.