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Discuss what is the appropriate weight of debt

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Reference no: EM131794124

(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.)

Reference no: EM131794124

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