6. (Chapter 13) Loredo Mining Inc. has 12 million shares of common stock outstanding and 300,000 7 percent annual coupon bonds outstanding, par value $1,000 each. The common stock currently sells for $25 per share and has a beta of 1.2, and the bonds have 15 years to maturity and sell for 100 percent of par. The market risk premium is 7 percent, T-bills are yielding 4 percent, and Loredo's tax rate is 21 percent. a. What is the firm's market value capital structure? b. If Loredo 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? (Hint: Calculate the WACC.)