Palm Fish’s balance sheet shows a total of noncallable $40 million long-term debt with a coupon rate of 6.50% and a yiel

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Palm Fish’s balance sheet shows a total of noncallable $40million long-term debt with a coupon rate of 6.50% and a yield tomaturity of 7.00%. This debt currently has a market value of$38.595 million. The balance sheet also shows that thecompany has 10 million shares of common stock, and the book valueof the common equity (common stock plus retained earnings) is $60million. The current stock price is $30.00 per share;stockholders' required return, rs, is 12.00%; and the firm's taxrate is 40%. The CFO thinks the WACC should be based onmarket value weights, but the president thinks book weights aremore appropriate. What is the difference between these twoWACCs?
2.23%
2.34%
2.45%
2.56%
2.67%