- 8 The Capital Structure Of Foster Medical Given In Terms Of Both Book Value And Market Value Is As Follows Book Val 1 (132.54 KiB) Viewed 52 times
8). The capital structure of Foster Medical (given in terms of both book value and market value) is as follows: Book Value Market Value After-tax Cost Bonds $15,000,000 $13,000,000 7.0% Preferred stock 2,000,000 2,500,000 9.0% Common equity 9,000,000 18,500,000 14.0% Retained Earnings 4,000,000 Totals $30,000,000 $34,000,000 a. What is the weighted average cost of capital using both Book Value and Market Value calculations for Foster Medical? b. What is theoretically the best weighting method? Why? 5:40 PM