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Titan Mining Corporation has 7.5 million shares of common stock outstanding, 250,000 shares of 4.2 percent...

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Finance

Titan Mining Corporation has 7.5 million shares of common stockoutstanding, 250,000 shares of 4.2 percent preferred stockoutstanding, and 140,000 bonds with a semiannual coupon of 5.1percent outstanding, par value $1000 each. The common stockcurrently sells for $51 per share and has a beta of 1.15, thepreferred stock currently sells for $103 per share, and the bondshave 15 years to maturity and sells for 107 percent of par. Themarket risk premium is 7.5 percent, T-bills are yielding 2.4percent, and the company's tax rate is 22 percent.

a. what is the firm's market value capital structure?

b. If the company is evaluating a new investment project thathas the same risk as the firm's typical project, what rate shouldthe firm use to discount the project's cash flows?

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