Bolero has compiled the following information on its financing costs:
Type of Financing Book Value Market Value Cost
Long-term debt $5,000,000 $2,000,000 10%
Short-term debt $5,000,000 $5,000,000 8%
Common Stock $10,000,000 $13,000,000 15%
Total $20,000,000 $20,000,000
Bolero is in the 34 percent tax bracket. Calculate the weighted average cost of capital (WACC) for Bolero using
1. Book value weights
2. Market value weights.