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Finding the WACC Titan Mining Corporation has 9 million shares of equity outstanding and 1,200,000 8.5 per cent semi-annual bonds outstanding, par value £100 each. The equity 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 per cent of par. The market risk premium is 10 per cent, T-bills are yielding 5 per cent, and Titan Mining's tax rate is 28 per cent.
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?
Which of the following was not an original responsibility of the Federal Reserve?
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