$30.000.000 par value of 20-year bonds issued in 2007 (today is 2010) paying 8% in interest Market rate for similar bonds is 6% 750.000 shares of preferred stock, market price = $30, dividend = $230 1.500.000 shares of common stock, market price = $20, dividend next period = $.75, expected growth rate = 10%, risk free rate = 4%. market premium = 12%, Beta = 1.21 Company's tax rate = 40%