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Titan mining corporation has 9.1 million shares of common stock
Titan mining corporation has 9.1 million shares of common stock outstanding and 350,000 4 percent seminannual bonds outstanding, par value $1,000 each. The common stock currently sells for $39 per share and has a beta of 1.55, and the bonds have 10 years maturity and sell for 110 percent of par. The market risk premium is 7.9 percent, t-bills are yielding 5 percent and the company's tax rate is 40 percent.
What is the firm's market value capital structure?
If the company is evalutating a new investment project that has the same risk as the firm's typical project, what rate should the firm use to discount the profject's cash flows?
Market Value Capital Structure
After tax cost of Bonds
Semi annual YTM
After tax cost of debt
This question was answered on: Feb 21, 2020
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