Problem
In August 2015 the capital structure of the Emerson Electric Corporation (EMR) (measured in book and market values) was as follows:
|
?($ Millions)
|
Book Value
|
Market Value
|
|
? Short-term debt
|
? $2,460
|
?$2,460
|
|
? Long-term debt
|
4,219
|
4,219
|
|
Common equity
|
8,049
|
35,719
|
|
Total capital
|
$14,728
|
$42,398
|
What weights should Emerson use when computing the firm's weighted average cost of capital?