Titan Mining Corporation has 9.4 million shares of common stock outstanding and 380,000 bonds that pay...

Titan Mining Corporation has 9.4 million shares of common stock outstanding and 380,000 bonds that pay a coupon rate of 4.8 percent APR, make semiannual payments and have a par value of $1,000 each. The common stock currently sells for $42 per share and has a beta of 1.1; the bonds have 10 years to maturity and sell for 113 percent of par. The market risk premium is 8.2 percent, T-bills are yielding 3 percent, and the company’s tax rate is 24 percent.

a.	What is the firm's market value capital structure? (Do not round intermediate calculations and round your answers to 4 decimal places, e.g., .3216.)
b.	If the company is evaluating a new investment project that has the same risk as the firm's typical project, what rate should the firm use to discount the project's cash flows (i.e. what is the WACC)? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

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jeff jeffy answered 1 year ago

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