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What is the firm market value capital structure

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Titan Mining (TM) Corporation has 8.5 million shares of common stock outstanding and 200.000 7.5% semiannual bonds outstanding, par value $1,000 each. The common stock currently sells for $34 per share and has a beta of 1.20 and the bonds have 15 years to maturity and sell for 93% of par. The market risk premium is 7%. T-bills are yielding 5% and tax rate is 35%.

a. What is the firm's market value capital structure

b. If TM 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 flow?

Reference no: EM132785538

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