a. What is the market debt-to-value ratio of the firm? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

b. What is Universitys WACC? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

Problem 13-7 WACC (LO1) Examine the following book-value balance sheet for University Products Inc. The preferred stock currently sells for $30 per share and pays a dividend of $3 a share. The common stock sells for $16 per share and has a beta of 0.8. There are 4 million common shares outstanding. The market risk premium is 10%, the risk-free rate is 6%, and the firm's tax rate is 40% BOOK-VALUE BALANCE SHEET (Figures in $ millions) Liabilities and Net Worth Bonds, coupon 5%, paid annually (maturity 10 years, current yield to maturity 6%) Assets Cash and short-term securities Accounts receivable Inventories Plant and equipment $. 2.e $12.0 3.0 0.4 7.6 11.0 $34.e 4. Preferred stock (par value $15 per share) 8.0 Common stock (par value $0.10) Additional paid-in stockholders' equity Retained earnings 20.0 $34.e Total Total