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A couple of things to the person who answers this 1) This needs to be done in Microsoft Office excel 2) Please show some work
A couple of things to the person who answers this
1) This needs to be done in Microsoft Office excel
2) Please show some work for the answers and just dont put the answers there need to be some equations to show the answer you got
Thanks for the help!!
For each appropriate situation, explain your reasoning or show your work. Work need not be done in Excel, but it probably would be easier for you to show your work and do some of the calculations using Excel. Total Points = 65 Titan Mining Corporation has 7.5 million shares of common stock outstanding, 250,000 shares of 4.2 percent preferred stock outstanding, and 140,000 bonds with a coupon rate of 5.1 percent outstanding, par value of $1,000 each. Coupons are payable semi-annually. The common stock currently sells for $51 per share and has a beta of 1.15, the preferred stock currently sells for $103 per share, and the bonds have 15 years to maturity and sell for 107 percent of par. The market risk premium is 7.5 percent. T-bills are yielding 2.4 percent, and the company's marginal tax rate is 22 percent. a. What is the firm's market value of common stock? Preferred stock? Debt? Total market value? (5 points each) b. What is the cost of common equity using the CAPM? (10 points) c. What is the cost of preferred stock? (5 points) d. What is the pre-tax cost of debt? (10 points) After-tax cost of debt? (2 points) e. What is the company's weighted average cost of capital - WACC? (8 points) f. The company is considering investing in a new project with a beta of 1.56. Assuming all else is the same as the rest of the company, what discount rate should you apply to the free cash flows of this project in calculating its NPV? (10 points)Step by Step Solution
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