What is the firm market value capital structure

Assignment Help Financial Management

Reference no: EM131952960

Titan Mining Corporation has 8.5 million shares of common stock outstanding and 290,000 4 percent semiannual bonds outstanding, par value $1,000 each. The common stock currently sells for $33 per share and has a beta of 1.25, and the bonds have 10 years to maturity and sell for 114 percent of par. The market risk premium is 7.3 percent, T-bills are yielding 6 percent, and the company’s tax rate is 38 percent.

a. What is the firm's market value capital structure? (Do not round intermediate calculations and round your answers to 4 decimal places, e.g., 32.1616.)

Weight

Debt

Equity

b. If the company 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?

Reference no: EM131952960

Questions Cloud

What is annual rate of return on investment : What is your annual rate of return on this investment. Your annual return is over 40% per year.

Company capital structure weights on book value : Filer Manufacturing has 7 million shares of common stock outstanding. What are the company's capital structure weights on a book value basis?

The annual return on your investment : The annual return on your investment is:

Purchase variable life insurance policy : If you purchase a variable life insurance policy, then amount of the death benefit depends on the returns of earned by funds where your premiums are invested.

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

The issuance of new equity shares is cash flow : The issuance of new equity shares is a cash flow from. The higher the Sharpe ratio, the

Emh premise versus the risk of ignoring emh : Consider the risk with investing based on the EMH premise versus the risk of ignoring EMH.

The total time-weighted rate of return for calendar quarter : The total time-weighted rate of return for the calendar quarter is ______ % and the holding period return for the calendar quarter is _____%

Calculate the net cash flows : Managers at Acme Doohickey Co. are considering two projects. But the table is incomplete; you will need to calculate the Net Cash Flows.

User Account

All Pages