Q. Show the Basis of weightings?
(i) Both costs of capital (Ke and Kd) as well as the WACC have been calculated using current ex-dividend (ex-interest) market values rather than statement of financial position/nominal values.
(ii) This is to make sure that a current market cost of finance is determined rather than an historic cost. Preferably a future WACC is wanted to discount future project cash flows and the current WACC based on current market rates is the best estimate for this.