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What is the firms market value capital structure

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Hankins Corporation has 6.3 million shares of common stock outstanding, 318,000 shares of 4.6 percent preferred stock outstanding, par value of $100, and 71,000 5.7 percent semiannual bonds outstanding, par value $2,000 each. The common stock currently sells for $74.10 per share and has a beta of 1.15, the preferred stock currently sells for $101.40 per share, and the bonds have 22 years to maturity and sell for 95.9 percent of par. The market risk premium is 6.7 percent, T-bills are yielding 3.3 percent, and the firm's tax rate is 24 percent.

Question 1: What is the firm's market value capital structure? market value weight of debt? market value weight of perfered stock? market value of weight of equity?

Question 2: What is the firm's cost of each form of financing? after tax cost of debt? cost of perfered stock? cost of equity?

Question 3: If the firm 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? weighted avg cost of captial?

Reference no: EM132505245

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