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IN AUGUST THE CAPITAL STRUCTURE OF THE EMERSON ELECTRONIC

IN AUGUST THE CAPITAL STRUCTURE OF THE EMERSON ELECTRONIC

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Author: Christine Farr
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 In August the capital structure of the Emerson Electronic corp ( EMR) ( measure in book and market values) appeared as follows.
(Thousand of dollars )             Book Value          Market values
Short-term debt                        1,152,000              1,152,000
Long-term debt                         11,967,000            11,967,000
Common equity                         9,017,000              26,220,000
Total Capital                               22,136,000            39,339,000
 What weight should Emerson use when computing the firm weighted average cost of capital?
The appropriate weight of debt, Wb is …..% ( round one decimal)
The appropriate weight of common equity Wcs is ….% ( round to one decimal)


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