Titan Mining Corporation has 9.1 million shares of common stock outstanding and 350,000 4.7 percent semiannual...

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Titan Mining Corporation has 9.1 million shares of common stockoutstanding and 350,000 4.7 percent semiannual bonds outstanding,par value $1,000 each. The common stock currently sells for $39 pershare and has a beta of 1.25; the bonds have 10 years to maturityand sell for 110 percent of par. The market risk premium is 7.9percent, T-bills are yielding 5 percent, and the company’s tax rateis 21 percent. a. What is the firm's market value capitalstructure? (Do not round intermediate calculations and round youranswers to 4 decimal places, e.g., .3216.) b. If the company isevaluating a new investment project that has the same risk as thefirm's typical project, what rate should the firm use to discountthe project's cash flows? (Do not round intermediate calculationsand enter your answer as a percent rounded to 2 decimal places,e.g., 32.16.)

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a MV of equityPrice of equitynumber of shares outstanding MV of equity399100000 354900000 MV of BondPar valuebonds outstandingage of par MV of Bond100035000011 See Answer

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Titan Mining Corporation has 9.1 million shares of common stockoutstanding and 350,000 4.7 percent semiannual bonds outstanding,par value $1,000 each. The common stock currently sells for $39 pershare and has a beta of 1.25; the bonds have 10 years to maturityand sell for 110 percent of par. The market risk premium is 7.9percent, T-bills are yielding 5 percent, and the company’s tax rateis 21 percent. a. What is the firm's market value capitalstructure? (Do not round intermediate calculations and round youranswers to 4 decimal places, e.g., .3216.) b. If the company isevaluating a new investment project that has the same risk as thefirm's typical project, what rate should the firm use to discountthe project's cash flows? (Do not round intermediate calculationsand enter your answer as a percent rounded to 2 decimal places,e.g., 32.16.)