a. What is the market debt-to-value ratio of the firm?

b. What is Universitys WACC?

Examine the following book-value balance sheet for University Products Inc. The preferred stock currently sells for $15 per share and pays a dividend of $3 a share. The common stock sells for $20 per share and has a beta of 0.8. There are 1 million common shares outstanding. The market risk premium is 12%, the risk-free rate is 8%, and the firm's tax rate is 21%. BOOK-VALUE BALANCE SHEET (Figures in $ millions) Liabilities and Net Worth Bonds, coupon = 6%, paid annually maturity= 10 years, current yield to maturity Preferred stock (par value $10 per share) Common stock (par value $0.40) Additional paid-in stockholders' equity Retained earnings Assets Cash and short-term securities $ 2.0 =7%) $10.0 Accounts receivable 5.0 3.0 Inventories 9.0 0.4 Plant and equipment 21.0 14.6 9.0 $37.0 $37.0 Total Total a. What is the market debt-to-value ratio of the firm? b. What is University's WACC? (For all the requirements, do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) Market debt-to-value ratio . b. WACC % Examine the following book-value balance sheet for University Products Inc. The preferred stock currently sells for $15 per share and pays a dividend of $3 a share. The common stock sells for $20 per share and has a beta of 0.8. There are 1 million common shares outstanding. The market risk premium is 12%, the risk-free rate is 8%, and the firm's tax rate is 21%. BOOK-VALUE BALANCE SHEET (Figures in $ millions) Liabilities and Net Worth Bonds, coupon = 6%, paid annually maturity= 10 years, current yield to maturity Preferred stock (par value $10 per share) Common stock (par value $0.40) Additional paid-in stockholders' equity Retained earnings Assets Cash and short-term securities $ 2.0 =7%) $10.0 Accounts receivable 5.0 3.0 Inventories 9.0 0.4 Plant and equipment 21.0 14.6 9.0 $37.0 $37.0 Total Total a. What is the market debt-to-value ratio of the firm? b. What is University's WACC? (For all the requirements, do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) Market debt-to-value ratio . b. WACC %