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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 percent, and Titan Mining's tax rate is 40 percent.
A. What is the firm's market value capital structure?
B. If Titan Mining 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?
A firm decides to use debt to raise its return on equity. It currently has sales of $2 million, total assets of $1 million and a debt ratio of 20%. It's net profit margin has been 10% and it expects it to stay there into the future. If it borrows an ..
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How would each of the following scenarios affect a firm's cost of debt Rd(1-T), its cost of equity, Rs, and its WACC? Indicate with a plus(+), a minus (-) or a zero (0) if the factor would raise, would lower or would have an undeterminable effect on ..
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bull write a brief company history including a mission statement if available.section iibull thoroughly explain at
Determine the amount that the market price of the company's stock is expected to drop on the ex-rights date, assuming that all other things are equal.
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