Question
In: Finance
Titan Mining Corporation has 9.4 million shares of common stock outstanding and 380,000 bonds that pay...
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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.) |
Solutions
jeff jeffy answered 1 year agoRelated Solutions
Titan Mining Corporation has 9.4 million shares of common stock outstanding and 380,000 4.8 percent semiannual...
Titan Mining Corporation has 9.4 million shares of common stock
outstanding and 380,000 4.8 percent semiannual bonds outstanding,
par value $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...
Raymond Mining Corporation has 9.4 million shares of common stock outstanding, 380,000 shares of 4% $100...
Raymond Mining Corporation has 9.4 million shares of common
stock outstanding, 380,000 shares of 4% $100 par value preferred
stock outstanding, and 161,000 7.50% semiannual bonds outstanding,
par value $1,000 each. The common stock currently sells for $42 per
share and has a beta of 1.20, the preferred stock currently sells
for $91 per share, and the bonds have 10 years to maturity and sell
for 113% of par. The market risk premium is 8.2%, T-bills are
yielding 3%, and...
Titan Mining Corp. has 8.5 million shares of common stock and 135,000 bonds outstanding. The common...
Titan Mining Corp. has 8.5 million shares of common stock and
135,000 bonds outstanding. The common stock is selling for $34 per
share and the estimated cost of equity is 13.4%. The bonds,
currently selling for 114% of par, are BB-rated with 10 years to
maturity. Similar risk bonds are trading at a default spread of
2.06%. The yield on T-bonds is 4%. Titan Mining’s corporate tax
rate is 35 percent. What is Titan’s weighted average cost of
capital? Please...
Titan Mining Corporation has 8 million shares of common stock outstanding, 5 million shares of preferred...
Titan Mining Corporation has 8 million shares of common stock
outstanding, 5 million shares of preferred stock outstanding, and
100,000 units of 9 percent semiannual bonds outstanding, par value
$1,000 each. The preferred stock pays a dividend of $6 per share.
The common stock currently sells for $32 per share and has a beta
of 1.15, the preferred stock currently sells for $67 per share, and
the bonds have 15 years to maturity and sell for 91 percent of par....
Titan Mining Corporation has 8 million shares of common stock outstanding, 5 million shares of preferred...
Titan Mining Corporation has 8 million shares of common stock
outstanding, 5 million shares of preferred stock outstanding, and
100,000 units of 9 percent semiannual bonds outstanding, par value
$1,000 each. The preferred stock pays a dividend of $6 per share.
The common stock currently sells for $32 per share and has a beta
of 1.15, the preferred stock currently sells for $67 per share, and
the bonds have 15 years to maturity and sell for 91 percent of par....
Titan Mining Corporation has 9.7 million shares of common stock outstanding, 410,000 shares of preferred stock...
Titan Mining Corporation has 9.7 million shares of common stock
outstanding, 410,000 shares of preferred stock outstanding, and
215,000 bonds outstanding with a par value of $1,000 each. The
common stock currently sells for $45 per share and has a beta of
1.35, the preferred stock currently sells for $95 per share, and
the bonds sell for 116 percent of par. The cost of common equity is
16.48 percent, preferred equity is 4.21 percent, and the debt's
yield to maturity...
Titan Mining Corporation has 8.9 million shares of common stock outstanding, 330,000 shares of preferred stock...
Titan Mining Corporation has 8.9 million shares of common stock
outstanding, 330,000 shares of preferred stock outstanding, and
175,000 bonds outstanding with a par value of $1,000 each.
The common stock currently sells for $37 per share and has a
beta of 1.45, the preferred stock currently sells for $87 per
share, and the bonds sell for 118 percent of par.
A. The cost of common equity is 15.17 percent, preferred equity
is 5.75 percent, and the debt's yield to...
Titan Mining Corporation has 6.2 million shares of common stock outstanding, 215,000 shares of 3.5 percent...
Titan Mining Corporation has 6.2 million shares of common stock
outstanding, 215,000 shares of 3.5 percent preferred stock
outstanding, and 100,000 bonds with a semiannual coupon rate of 5.2
percent outstanding, par value $1,000 each. The common stock
currently sells for $74 per share and has a beta of 1.10, the
preferred stock has a par value of $100 and currently sells for $82
per share, and the bonds have 16 years to maturity and sell for 106
percent of...
titan mining corporation has 14 million shares of common stock outstanding 900,000 shares of 9 percent...
titan mining corporation has 14 million shares of common stock
outstanding 900,000 shares of 9 percent preferred stock outstanding
and 210,000 ten percent semiannual bonds outstanding, par value
$1,000 each. The common stock currently sells for $34 per share and
has a beta of 1.15, the preferred stock currently sell for $80 per
share, and the bonds have 17 years to maturity and sell for 91
percent of par. The market risk premium is 11.5 percent, T-bills
are yielding 7.5...
Titan Mining Corporation has 9.9 million shares of common stock outstanding, 430,000 shares of 6 percent...
Titan Mining Corporation has 9.9 million shares of common stock
outstanding, 430,000 shares of 6 percent preferred stock
outstanding, and 225,000 8.7 percent semiannual bonds outstanding,
par value $1,000 each. The common stock currently sells for $47 per
share and has a beta of 1.45, the preferred stock currently sells
for $97 per share, and the bonds have 20 years to maturity and sell
for 118 percent of par. The market risk premium is 8.7 percent,
T-bills are yielding 5...
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