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Compare Amazon Lite with Mutual Insurance using the followingbalance sheet information and calculate their WACC. Amazon CurrentAssets $2,000,000 Current Liabilities $1,000,000 Fixed Assets$7,000,000 Long-term Liabilities $5,000,000 Total Assets $9,000,000Owners Equity $3,000,000 Mutual Insurance Bonds outstanding: 3,000selling at $980 Common stock outstanding: 260,000 selling at $23.40If the after-tax cost of debt is 8% for both companies and the costof equity is 12% for Amazon and 13% for Mutual, which company hasthe highest WACC?
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