Answered step by step
Verified Expert Solution
Question
1 Approved Answer
9.96 is also wrong 9.747 and 9.417 is also wrong answers Problem 14-16 Finding the WACC (L04) Raymond Mining Corporation has 9.4 million shares of
9.96 is also wrong
9.747 and 9.417 is also wrong answers
Problem 14-16 Finding the WACC (L04) Raymond Mining Corporation has 9.4 million shares of common stock outstanding, 380,000 shares of 4% $100 par value preferred stock outstanding, and 161000 750% semiannual bonds outstanding, par Value $1.000 each The common stock currently sells for $42 per share and has a beto of 120, the preferred stock currently sells for $91 per share, and the bonds have 10 years to maturity and sell for 113% of par The market risk premium is 8.2%, T-bills are yielding 3%, and Raymond Mining's tox is 35% a. What is the firm's market value capital structure? (Enter your answers in whole dollars.) Market value $181930000 Debt Equity Preferred stock 5 394800000 $ 34580000 b. If Raymond Mining 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? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 3 decimal places.) Discount rate 9.66 @ o BI e to search Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started