When Estimating a Weighted Average Cost of Capital,a Firm Can

question 58

Essay

When estimating a weighted average cost of capital,a firm can use either book values or market values for estimating the value of the component sources of capital.Where would you find book values,and what value do they represent? How would you calculate market values? In general,would you prefer to use market or book values for estimating the WACC? Under what circumstances would you use book values?

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