What is the firm market value capital structure

Assignment Help Financial Management

Reference no: EM131935622

Titan Mining Corporation has 8.9 million shares of common stock outstanding and 330,000 5 percent semiannual bonds outstanding, par value $1,000 each. The common stock currently sells for $37 per share and has a beta of 1.45, and the bonds have 15 years to maturity and sell for 118 percent of par. The market risk premium is 7.7 percent, T-bills are yielding 4 percent, and Titan Mining’s tax rate is 40 percent. a. What is the firm's market value capital structure? (Do not round intermediate calculations and round your final answers to 4 decimal places (e.g., 32.1616).) Market value weight Debt Equity 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? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places (e.g., 32.16).) Discount rate %

Reference no: EM131935622

Questions Cloud

How you would respond to the request at the meeting : You have been asked to make a short presentation at your company's annual capital budget meeting to present an analysis of the strengths and weaknesses.

What is the yield to maturity on each one : Ashly is considering the purchase of two bonds, each of which has a face value of $1,000. Bond A has a 6% coupon payable semi-annually with 10 years until.

What fraction of qualified majority applicants gets denied : Imagine a community where majority discriminates against minority population. what fraction of qualified majority applicants gets denied?

Discuss the capital budgeting selection methodologies : You have been asked to make a short presentation at your company's annual capital budget meeting to present an analysis of the strengths and weaknesses.

What is the firm market value capital structure : what rate should the firm use to discount the project's cash flows? What is the firm's market value capital structure?

Find the net present value of the opportunity : You have been asked by the president by Company X to evaluate the proposed acquisition of a Computer Numeric Control (CNC) machine to manufacture a new type.

The company follows the residual dividend policy : If the company follows the residual dividend policy, how much cash dividend can be distributed, and what will be its dividend payout ratio?

Explain who is doing financially better on each measure : You have been asked to perform financial condition ratio analyses for two communities, Thriftyville and Myopica, based on data culled from each of their CAFRs.

Cash flows of the two mutually exclusive projects : Consider the following cash flows of the two mutually exclusive projects for Mario Brothers.

User Account

All Pages