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Why Do We Use Market-Based Weights Instead of Book-Value Weights

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


Definitions:

Networking

Engaging with others to share information and build contacts either for professional or social reasons.

Self-Interest

The consideration of one's own advantage or benefit, often driving behavior and decision-making based on personal gains.

Organizational Goals

The objectives that a company aims to achieve, which guide its operations and strategic planning.

High Machs

Individuals characterized by a high Machiavellianism trait, often noted for manipulation and a strategic mindset in interpersonal relationships.

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