(Capital structure weights) In August of 2009 the capital structure of the Emerson Electric Corporation (EMIR) (measured in book and market values) appeared as follows:
(thousands of dollars) Book values Market values
short-term debt $1,160,000 $1,160,000
long-term debt 11,868,000 11,868,000
common equity 9,129,000 26,121,000
total capital $22,157,000 $39,149,000
What weights should Emerson use when computing the firm's weighted average cost of capital?
What is the appropriate weight of debt? (Round to one decimal place.)
What is the appropriate weight of common equity? (Round to one decimal place.)