A company has 9.8 million shares of common stock outstanding, 420,000 shares of 5 percent preferred stock outstanding, and 220,000 8.6 percent semiannual bonds outstanding, par value $1,000 each. The common stock currently sells for $46 per share and has a beta of 1.40, the preferred stock currently sells for $96 per share, and the bonds have 15 years to maturity and sell for 117 percent of par. The market risk premium is 8.6 percent, T-bills are yielding 4 percent, and the companys tax rate is 40 percent.

a. What is the firms market value capital structure weights? (Do not round intermediate calculations. Round your answers to 4 decimal places, e.g., 0.1234.) (Market value weight, Debt, Preferred stock, Equity)

b. If the company is evaluating a new investment project that has the same risk as its typical project, what rate should it use to discount the projects expected future cash flows? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Discount rate = ______%