Question

While calculating weighted average cost of capital market value weights are preferred because

Answer 1

Answer:

The 10-year Treasury rate can be used as the risk-free rate and the expected market return is generally estimated to be 7%. Thus, Walmart's cost of equity is 2.7% + 0.37 * (7% - 2.7%), or 4.3%. The cost of debt is calculated by dividing the company's interest expense by its debt load.