11 JUEUL A Calculate the market value capital structure and WACC 4 5 Titan Manufacturing Corporation has 8.5 million shares of common stock outstanding 250,000 shares of preferred stock outstanding and 135,000 7.5% semiannual bonds outstanding par value $1,000 each. The common stock currently sells for $34 per share and hasa beta of 1.25. The preferred currently sells for $91 per share and the bonds have 15 years to maturity and will for 114 of par. The market risk premium is 7.5% T-bills are yielding 4 and Titan Mining's tax rate is 35% 6 2 8 9 10 11 12 13 14 15 16 17 Debe Bonds Outstanding Settlement date Maturity Date Annual Coup Rate Coupons per year Sond Price Par Vale 5 19 20 21 22 Common Stock Shared Outstanding Beta Share Price Preferred Stock Outstanding Share Outstanding Coupon Rate Share Price Par Value 24 25 26 27 28 25 30 31 32 33 34 35 36 37 38 139 Market Market-risk Premium Risk-free Rate What is the firm's market value capital structure Equity Market value Debt Market Value Preferred Market Value Total Market Value 42 43 Weight of Equity Weight of Debt Weight of Preferred Stock 888 y fac A c E What is the Company's WACC? Pre-tax Cost of Debt After-tax Cost of Debt Cost of Equity Cost of Preferred Stock WACC 5 6 37 58 99 50 51 52 53 54 55 56 52 58 59 60 51 62 63 64 65 66 67 68 69 70 21 72 73 74 25 76 77 78 30