Can you help me for this question?
Titan Mining Corporation has 9 million shares of common stock outstanding, 250,000 shares of 6 percent preferred stock outstanding, and 105,000 7.5 percent semiannual bonds outstanding, par value $1,000 each. The common stock currently sells for $34 per share and has a beta of 1.25, the preferred stock currently sells for $91 per share, and the bonds have 15 years to maturity and sell for 93 percent of par. The market risk premium is 8.5 percent, T-bills are yielding 5 percent, and Titan Mining’s tax rate is 35 percent.
a.What is the fi rm’s market value capital structure?
b.If Titan Mining is evaluating a new investment project that has the same risk as the fi rm’s typical project, what rate should the fi rm use to discount the project’s cash fl ows?
ros46128
Titan Mining Corporation has 9 million shares of common stock outstanding, 250,000 shares of 6 percent preferred stock outstanding, and 105,000 7.5 percent semiannual bonds outstanding, par value $1,000 each. The common stock currently sells for $34 per share and has a beta of 1.25, the preferred stock currently sells for $91 per share, and the bonds have 15 years to maturity and sell for 93 percent of par. The market risk premium is 8.5 percent, T-bills are yielding 5 percent, and Titan Mining’s tax rate is 35 percent.
a.What is the fi rm’s market value capital structure?
b.If Titan Mining is evaluating a new investment project that has the same risk as the fi rm’s typical project, what rate should the fi rm use to discount the project’s cash fl ows?
ros46128