(Defining capital structure weights
(Defining capital structure weights) In August of 2009 the capital structure of the Emerson Electric Corporation (EMR) (measured in book and market values) appeared as follows:
| (Thousands of dollars) | Book Values | Market Values | |
| Short-term debt | $1,172,000 | 1,172,000 | |
| Long-term debt | 11,917,000 | 11,917,000 | |
| Common equity | 9,163,000 | 26,241,000 | |
| Total capital | $22,252,000 | $39,330,000 |
What weights should Emerson use when computing the firm’s weighted average cost of capital?
The appropriate weight of debt,
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